NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and principal accounting policies
Signet Jewelers Limited (“Signet” or the “Company”), a holding company incorporated in Bermuda, is the world’s largest retailer of diamond jewelry. The Company operates through its 100% owned subsidiaries with sales primarily in the United States (“US”), United Kingdom (“UK”) and Canada. Signet manages its business as three reportable segments: North America, International, and Other. The “Other” reportable segment consists of all non-reportable segments, including subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones and unallocated corporate administrative functions. See Note 4 for additional discussion of the Company’s segments.
Signet’s sales are seasonal, with the fourth quarter accounting for approximately 35-40% of annual sales, with December being by far the highest volume month of the year. The “Holiday Season” consists of results for the months of November and December. As a result of our strategic credit outsourcing and transformation initiatives, we anticipate our operating profit will be almost entirely generated in the fourth quarter.
The Company has evaluated and determined that there are no additional events and transactions subsequent to November 2, 2019 for potential recognition or disclosure through the date the condensed consolidated interim financial statements were issued.
Basis of preparation
The condensed consolidated financial statements of Signet are prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US generally accepted accounting principles (“US GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in Signet’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019 filed with the SEC on April 3, 2019. Signet has reclassified certain prior year amounts in its consolidated financial statements and notes to the consolidated financial statements to conform to the current year presentation.
Use of estimates
The preparation of these condensed consolidated financial statements, in conformity with US GAAP and SEC regulations for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are primarily made in relation to the valuation of accounts receivables, inventories, deferred revenue, derivatives, employee benefits, income taxes, contingencies, asset impairments, leases, indefinite-lived intangible assets, depreciation and amortization of long-lived assets, as well as accounting for business combinations.
Fiscal year
The Company’s fiscal year ends on the Saturday nearest to January 31st. Fiscal 2020 and Fiscal 2019 refer to the 52 week periods ending February 1, 2020 and February 2, 2019, respectively. Within these condensed consolidated financial statements, the third quarter of the relevant fiscal years 2020 and 2019 refer to the 13 weeks ended November 2, 2019 and November 3, 2018, respectively.
Foreign currency translation
The financial position and operating results of certain foreign operations, including certain subsidiaries operating in the UK as part of the International segment and Canada as part of the North America segment, are consolidated using the local currency as the functional currency. Assets and liabilities are translated at the rates of exchange on the balance sheet date, and revenues and expenses are translated at the monthly average rates of exchange during the period. Resulting translation gains or losses are included in the accompanying condensed consolidated statements of shareholders’ equity as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains or losses resulting from foreign currency transactions are included in other operating income, net within the condensed consolidated statements of operations.
See Note 9 for additional information regarding the Company’s foreign currency translation.
2. New accounting pronouncements
The following section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.
New accounting pronouncements recently adopted
Leases
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The new guidance primarily impacts lessee accounting by requiring the recognition of a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. The lease liability will be equal to the present value of all reasonably certain remaining lease payments. The right-of-use asset will be based on the liability, subject to adjustment for initial direct costs. Lease agreements that are 12 months or less are permitted to be excluded from the balance sheet. In general, leases will be amortized on a straight-line basis with the exception of finance lease agreements. Signet adopted ASU 2016-02 and related updates effective February 3, 2019 using the additional transition method provided for in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” which permitted the Company as of the effective date of ASU 2016-02 to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The impact of this approach was deemed immaterial upon adoption of ASU 2016-02.
The Company has elected the practical expedient to account for the lease and non-lease maintenance components as a single lease component. Therefore, for those leases, the lease payments used to measure the lease liability include all of the fixed consideration in the contract. Additionally, the Company utilized the practical expedient relief package, as well as the short-term leases and portfolio approach practical expedients. The effects of the changes made to the Company’s condensed consolidated balance sheet as of February 3, 2019 for the adoption of ASC 842 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
February 2, 2019
|
|
Adjustments due to ASC 842
|
|
February 3, 2019
|
|
Current assets:
|
|
|
|
|
|
|
|
Other current assets
|
|
$
|
244.0
|
|
|
$
|
(8.8
|
)
|
|
$
|
235.2
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
Operating lease right-of-use assets
|
|
—
|
|
|
1,927.2
|
|
|
1,927.2
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities
|
|
502.8
|
|
|
(32.9
|
)
|
|
469.9
|
|
|
Operating lease liabilities
|
|
—
|
|
|
376.5
|
|
|
376.5
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
Operating lease liabilities
|
|
—
|
|
|
1,676.9
|
|
|
1,676.9
|
|
|
Other liabilities
|
|
224.1
|
|
|
(102.1
|
)
|
|
122.0
|
|
See additional disclosure requirements related to leases within Note 13.
In addition to the pronouncement above, the following ASU was adopted as of February 3, 2019. The impact on the Company's consolidated financial statements is described within the table below.
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|
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|
Standard
|
|
Description
|
|
ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, issued August 2017.
|
|
Expands the types of risk management strategies eligible for hedge accounting, refines the documentation and effectiveness assessment requirements and modifies the presentation and disclosure requirements for hedge accounting activities. The adoption of ASU 2017-12 did not have a material impact on the Company’s financial position or results of operations.
|
New accounting pronouncements issued not yet adopted
The Company is currently evaluating the impact on its consolidated financial statements of the following ASUs:
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|
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|
Standard
|
|
Description
|
|
ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, issued July 2018.
|
|
Aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.
|
|
ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, issued August 2018.
|
|
Modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans and clarifies the disclosure requirements regarding projected benefit obligations and accumulated benefit obligations. The ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted.
|
|
ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, issued August 2018.
|
|
Modifies the disclosure requirements on fair value measurements in Topic 820 and eliminates ‘at a minimum’ from the phrase ‘an entity shall disclose at a minimum’ to promote the appropriate exercise of discretion by entities when considering fair value disclosures and to clarify that materiality is an appropriate consideration. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.
|
|
ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued June 2016.
|
|
Requires entities to measure and recognize expected credit losses for financial assets measured at amortized cost basis. The estimate of expected credit losses should consider historical information, current information, and reasonable and supportable forecasts of expected losses over the remaining contractual life that affect collectability. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted.
|
3. Revenue recognition
The following tables provide the Company’s revenue, disaggregated by banner, major product and channel, for the 13 and 39 weeks ended November 2, 2019 and November 3, 2018:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended November 2, 2019
|
|
13 weeks ended November 3, 2018
|
|
(in millions)
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
Sales by banner:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kay
|
$
|
466.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
466.7
|
|
|
$
|
451.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
451.2
|
|
|
Zales
|
220.3
|
|
|
—
|
|
|
—
|
|
|
220.3
|
|
|
222.7
|
|
|
—
|
|
|
—
|
|
|
222.7
|
|
|
Jared
|
211.3
|
|
|
—
|
|
|
—
|
|
|
211.3
|
|
|
220.5
|
|
|
—
|
|
|
—
|
|
|
220.5
|
|
|
Piercing Pagoda
|
68.3
|
|
|
—
|
|
|
—
|
|
|
68.3
|
|
|
61.4
|
|
|
—
|
|
|
—
|
|
|
61.4
|
|
|
James Allen
|
60.8
|
|
|
—
|
|
|
—
|
|
|
60.8
|
|
|
52.5
|
|
|
—
|
|
|
—
|
|
|
52.5
|
|
|
Peoples
|
37.1
|
|
|
—
|
|
|
—
|
|
|
37.1
|
|
|
39.8
|
|
|
—
|
|
|
—
|
|
|
39.8
|
|
|
Regional banners
|
6.2
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|
16.2
|
|
|
—
|
|
|
—
|
|
|
16.2
|
|
|
International segment
|
—
|
|
|
106.4
|
|
|
—
|
|
|
106.4
|
|
|
—
|
|
|
121.3
|
|
|
—
|
|
|
121.3
|
|
|
Other(1)
|
—
|
|
|
—
|
|
|
10.6
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
6.1
|
|
|
Total sales
|
$
|
1,070.7
|
|
|
$
|
106.4
|
|
|
$
|
10.6
|
|
|
$
|
1,187.7
|
|
|
$
|
1,064.3
|
|
|
$
|
121.3
|
|
|
$
|
6.1
|
|
|
$
|
1,191.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 weeks ended November 2, 2019
|
|
39 weeks ended November 3, 2018
|
|
(in millions)
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
Sales by banner:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kay
|
$
|
1,570.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,570.4
|
|
|
$
|
1,580.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,580.4
|
|
|
Zales
|
781.2
|
|
|
—
|
|
|
—
|
|
|
781.2
|
|
|
799.3
|
|
|
—
|
|
|
—
|
|
|
799.3
|
|
|
Jared
|
720.9
|
|
|
—
|
|
|
—
|
|
|
720.9
|
|
|
759.2
|
|
|
—
|
|
|
—
|
|
|
759.2
|
|
|
Piercing Pagoda
|
225.1
|
|
|
—
|
|
|
—
|
|
|
225.1
|
|
|
203.4
|
|
|
—
|
|
|
—
|
|
|
203.4
|
|
|
James Allen
|
166.4
|
|
|
—
|
|
|
—
|
|
|
166.4
|
|
|
160.2
|
|
|
—
|
|
|
—
|
|
|
160.2
|
|
|
Peoples
|
124.3
|
|
|
—
|
|
|
—
|
|
|
124.3
|
|
|
134.2
|
|
|
—
|
|
|
—
|
|
|
134.2
|
|
|
Regional banners
|
23.7
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
|
62.1
|
|
|
—
|
|
|
—
|
|
|
62.1
|
|
|
International segment
|
—
|
|
|
331.8
|
|
|
—
|
|
|
331.8
|
|
|
—
|
|
|
381.5
|
|
|
—
|
|
|
381.5
|
|
|
Other(1)
|
—
|
|
|
—
|
|
|
40.0
|
|
|
40.0
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
|
12.1
|
|
|
Total sales
|
$
|
3,612.0
|
|
|
$
|
331.8
|
|
|
$
|
40.0
|
|
|
$
|
3,983.8
|
|
|
$
|
3,698.8
|
|
|
$
|
381.5
|
|
|
$
|
12.1
|
|
|
$
|
4,092.4
|
|
|
|
|
|
(1)
|
Includes sales from Signet’s diamond sourcing initiative.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended November 2, 2019
|
|
13 weeks ended November 3, 2018
|
|
(in millions)
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
Sales by product:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bridal
|
$
|
499.3
|
|
|
$
|
43.9
|
|
|
$
|
—
|
|
|
$
|
543.2
|
|
|
$
|
514.6
|
|
|
$
|
51.9
|
|
|
$
|
—
|
|
|
$
|
566.5
|
|
|
Fashion
|
342.4
|
|
|
21.3
|
|
|
—
|
|
|
363.7
|
|
|
332.5
|
|
|
23.6
|
|
|
—
|
|
|
356.1
|
|
|
Watches
|
41.2
|
|
|
35.5
|
|
|
—
|
|
|
76.7
|
|
|
45.7
|
|
|
41.2
|
|
|
—
|
|
|
86.9
|
|
|
Other(1)
|
187.8
|
|
|
5.7
|
|
|
10.6
|
|
|
204.1
|
|
|
171.5
|
|
|
4.6
|
|
|
6.1
|
|
|
182.2
|
|
|
Total sales
|
$
|
1,070.7
|
|
|
$
|
106.4
|
|
|
$
|
10.6
|
|
|
$
|
1,187.7
|
|
|
$
|
1,064.3
|
|
|
$
|
121.3
|
|
|
$
|
6.1
|
|
|
$
|
1,191.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 weeks ended November 2, 2019
|
|
39 weeks ended November 3, 2018
|
|
(in millions)
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
Sales by product:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bridal
|
$
|
1,654.3
|
|
|
$
|
139.8
|
|
|
$
|
—
|
|
|
$
|
1,794.1
|
|
|
$
|
1,730.2
|
|
|
$
|
159.3
|
|
|
$
|
—
|
|
|
$
|
1,889.5
|
|
|
Fashion
|
1,245.2
|
|
|
64.9
|
|
|
—
|
|
|
1,310.1
|
|
|
1,223.4
|
|
|
76.7
|
|
|
—
|
|
|
1,300.1
|
|
|
Watches
|
142.4
|
|
|
108.8
|
|
|
—
|
|
|
251.2
|
|
|
156.7
|
|
|
127.1
|
|
|
—
|
|
|
283.8
|
|
|
Other(1)
|
570.1
|
|
|
18.3
|
|
|
40.0
|
|
|
628.4
|
|
|
588.5
|
|
|
18.4
|
|
|
12.1
|
|
|
619.0
|
|
|
Total sales
|
$
|
3,612.0
|
|
|
$
|
331.8
|
|
|
$
|
40.0
|
|
|
$
|
3,983.8
|
|
|
$
|
3,698.8
|
|
|
$
|
381.5
|
|
|
$
|
12.1
|
|
|
$
|
4,092.4
|
|
|
|
|
|
(1)
|
Other revenue primarily includes gift, beads and other miscellaneous jewelry sales, repairs, warranty and other miscellaneous non-jewelry sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended November 2, 2019
|
|
13 weeks ended November 3, 2018
|
|
(in millions)
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
Sales by channel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store
|
$
|
943.9
|
|
|
$
|
93.9
|
|
|
$
|
—
|
|
|
$
|
1,037.8
|
|
|
$
|
952.1
|
|
|
$
|
108.5
|
|
|
$
|
—
|
|
|
$
|
1,060.6
|
|
|
E-commerce
|
126.8
|
|
|
12.5
|
|
|
—
|
|
|
139.3
|
|
|
112.2
|
|
|
12.8
|
|
|
—
|
|
|
125.0
|
|
|
Other
|
—
|
|
|
—
|
|
|
10.6
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
6.1
|
|
|
Total sales
|
$
|
1,070.7
|
|
|
$
|
106.4
|
|
|
$
|
10.6
|
|
|
$
|
1,187.7
|
|
|
$
|
1,064.3
|
|
|
$
|
121.3
|
|
|
$
|
6.1
|
|
|
$
|
1,191.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 weeks ended November 2, 2019
|
|
39 weeks ended November 3, 2018
|
|
(in millions)
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
North America
|
|
International
|
|
Other
|
|
Consolidated
|
|
Sales by channel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store
|
$
|
3,198.4
|
|
|
$
|
294.9
|
|
|
$
|
—
|
|
|
$
|
3,493.3
|
|
|
$
|
3,316.0
|
|
|
$
|
342.5
|
|
|
$
|
—
|
|
|
$
|
3,658.5
|
|
|
E-commerce
|
413.6
|
|
|
36.9
|
|
|
—
|
|
|
450.5
|
|
|
382.8
|
|
|
39.0
|
|
|
—
|
|
|
421.8
|
|
|
Other
|
—
|
|
|
—
|
|
|
40.0
|
|
|
40.0
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
|
12.1
|
|
|
Total sales
|
$
|
3,612.0
|
|
|
$
|
331.8
|
|
|
$
|
40.0
|
|
|
$
|
3,983.8
|
|
|
$
|
3,698.8
|
|
|
$
|
381.5
|
|
|
$
|
12.1
|
|
|
$
|
4,092.4
|
|
The Company recognizes revenues when control of the promised goods and services are transferred to customers, in an amount that reflects the consideration expected to be received in exchange for those goods. Transfer of control generally occurs at the time merchandise is taken from a store, or upon receipt of the merchandise by a customer for an e-commerce shipment. The Company excludes all taxes assessed by government authorities and collected from a customer from its reported sales. The Company’s revenue streams and their respective accounting treatments are further discussed below.
Merchandise sales and repairs
Store sales are recognized when the customer receives and pays for the merchandise at the store with cash, in-house customer finance, private label credit card programs, a third-party credit card or a lease purchase option. For online sales shipped to customers, sales are recognized at the estimated time the customer has received the merchandise. Amounts related to shipping and handling that are billed to customers are reflected in sales and the related costs are reflected in cost of sales. Revenues on the sale of merchandise are reported net of anticipated returns and sales tax collected. Returns are estimated based on previous return rates experienced. Any deposits received from a customer for merchandise are deferred and recognized as revenue when the customer receives the merchandise. Revenues derived from providing replacement merchandise on behalf of insurance organizations are recognized upon receipt of the merchandise by the customer. Revenues on repair of merchandise are recognized when the service is complete and the customer collects the merchandise at the store.
Extended service plans and lifetime warranty agreements (“ESP”)
The Company recognizes revenue related to ESP sales in proportion to when the expected costs will be incurred. The deferral period for ESP sales is determined from patterns of claims costs, including estimates of future claims costs expected to be incurred. Management reviews the trends in claims to assess whether changes are required to the revenue and cost recognition rates utilized. A significant change in estimates related to the time period or pattern in which warranty-related costs are expected to be incurred could materially impact revenues. All direct costs associated with the sale of these plans are deferred and amortized in proportion to the revenue recognized and disclosed as either other current assets or other assets in the condensed consolidated balance sheets. Unamortized deferred selling costs as of November 2, 2019, February 2, 2019 and November 3, 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Deferred ESP selling costs
|
|
|
|
|
|
|
Other current assets
|
$
|
23.5
|
|
|
$
|
23.8
|
|
|
$
|
30.0
|
|
|
Other assets
|
76.1
|
|
|
75.4
|
|
|
87.1
|
|
|
Total deferred ESP selling costs
|
$
|
99.6
|
|
|
$
|
99.2
|
|
|
$
|
117.1
|
|
The North America segment sells ESP, subject to certain conditions, to perform repair work over the life of the product. Revenue from the sale of the lifetime ESP is recognized consistent with the estimated pattern of claim costs expected to be incurred by the Company in connection with performing under the ESP obligations. Lifetime ESP revenue is deferred and recognized over a maximum of 17 years of the sale of the warranty contract. Although claims experience varies between our national banners, thereby resulting in different recognition rates, approximately 55% of revenue is recognized within the first two years on a weighted average basis.
The North America segment sells a Jewelry Replacement Plan (“JRP”). The JRP is designed to protect customers from damage or defects of purchased merchandise for a period of three years. If the purchased merchandise is defective or becomes damaged under normal use in that time period, the item will be replaced. JRP revenue is deferred and recognized on a straight-line basis over the period of expected claims costs.
Signet also sells warranty agreements in the capacity of an agent on behalf of a third-party. The commission that Signet receives from the third-party is recognized at the time of sale less an estimate of cancellations based on historical experience.
Sale vouchers
Certain promotional offers award sale vouchers to customers who make purchases above a certain value, which grant a fixed discount on a future purchase within a stated time frame. The Company accounts for such vouchers by allocating the fair value of the voucher between the initial purchase and the future purchase using the relative-selling-price method. Sale vouchers are not sold on a stand-alone basis. The fair value of the voucher is determined based on the average sales transactions in which the vouchers were issued, when the vouchers are expected to be redeemed and the estimated voucher redemption rate. The fair value allocated to the future purchase is recorded as deferred revenue.
Consignment inventory sales
Sales of consignment inventory are accounted for on a gross sales basis as the Company is the primary obligor providing independent advice, guidance and after-sales service to customers. The products sold from consignment inventory are indistinguishable from other products that are sold to customers and are sold on the same terms. Supplier products are selected at the discretion of the Company. The Company is responsible for determining the selling price, physical security of the products and collections of accounts receivable.
Deferred revenue
Deferred revenue is comprised primarily of ESP and sale voucher promotions as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
ESP deferred revenue
|
$
|
919.5
|
|
|
$
|
927.6
|
|
|
$
|
892.8
|
|
|
Voucher promotions and other
|
41.0
|
|
|
38.9
|
|
|
32.0
|
|
|
Total deferred revenue
|
$
|
960.5
|
|
|
$
|
966.5
|
|
|
$
|
924.8
|
|
|
|
|
|
|
|
|
|
Disclosed as:
|
|
|
|
|
|
|
Current liabilities
|
$
|
267.3
|
|
|
$
|
270.0
|
|
|
$
|
253.1
|
|
|
Non-current liabilities
|
693.2
|
|
|
696.5
|
|
|
671.7
|
|
|
Total deferred revenue
|
$
|
960.5
|
|
|
$
|
966.5
|
|
|
$
|
924.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
ESP deferred revenue, beginning of period
|
$
|
930.2
|
|
|
$
|
906.6
|
|
|
$
|
927.6
|
|
|
$
|
916.1
|
|
|
Plans sold(1)
|
78.0
|
|
|
72.3
|
|
|
264.5
|
|
|
259.2
|
|
|
Revenue recognized
|
(88.7
|
)
|
|
(86.1
|
)
|
|
(272.6
|
)
|
|
(282.5
|
)
|
|
ESP deferred revenue, end of period
|
$
|
919.5
|
|
|
$
|
892.8
|
|
|
$
|
919.5
|
|
|
$
|
892.8
|
|
|
|
|
|
(1)
|
Includes impact of foreign exchange translation.
|
4. Segment information
Financial information for each of Signet’s reportable segments is presented in the tables below. Signet’s chief operating decision maker utilizes sales and operating income, after the elimination of any inter-segment transactions, to determine resource allocations and performance assessment measures. Signet manages its business as three reportable segments: North America, International, and Other. Signet’s sales are derived from the retailing of jewelry, watches, other products and services as generated through the management of its reportable segments.
The North America reportable segment operates across the US and Canada. Its US stores operate nationally in malls and off-mall locations principally as Kay (Kay Jewelers and Kay Jewelers Outlet), Zales (Zales Jewelers and Zales Outlet), Jared (Jared The Galleria Of Jewelry and Jared Vault), James Allen and Piercing Pagoda, which operates through mall-based kiosks. Its Canadian stores operate as the Peoples Jewellers store banner. The segment also operates a variety of mall-based regional banners.
The International reportable segment operates stores in the UK, Republic of Ireland and Channel Islands. Its stores operate in shopping malls and off-mall locations (i.e. high street) principally as H.Samuel and Ernest Jones.
The Other reportable segment consists of all non-reportable segments that are below the quantifiable threshold for separate disclosure as a reportable segment, including subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones and unallocated corporate administrative functions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Sales:
|
|
|
|
|
|
|
|
|
North America segment
|
$
|
1,070.7
|
|
|
$
|
1,064.3
|
|
|
$
|
3,612.0
|
|
|
$
|
3,698.8
|
|
|
International segment
|
106.4
|
|
|
121.3
|
|
|
331.8
|
|
|
381.5
|
|
|
Other
|
10.6
|
|
|
6.1
|
|
|
40.0
|
|
|
12.1
|
|
|
Total sales
|
$
|
1,187.7
|
|
|
$
|
1,191.7
|
|
|
$
|
3,983.8
|
|
|
$
|
4,092.4
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
North America segment(1)
|
$
|
(5.2
|
)
|
|
$
|
(19.5
|
)
|
|
$
|
67.1
|
|
|
$
|
(561.0
|
)
|
|
International segment(2)
|
(5.1
|
)
|
|
(4.4
|
)
|
|
(14.1
|
)
|
|
(18.1
|
)
|
|
Other(3)
|
(29.6
|
)
|
|
(24.9
|
)
|
|
(117.9
|
)
|
|
(102.0
|
)
|
|
Total operating income (loss)
|
$
|
(39.9
|
)
|
|
$
|
(48.8
|
)
|
|
$
|
(64.9
|
)
|
|
$
|
(681.1
|
)
|
|
|
|
|
(1)
|
Operating income (loss) during the 39 weeks ended November 2, 2019 includes a $47.7 million out-of-period goodwill adjustment. In addition, operating income (loss) during the 13 and 39 weeks ended November 2, 2019 includes $1.4 million and $2.6 million, respectively, related to inventory charges recorded in conjunction with the Company’s restructuring activities. Operating income (loss) during the 39 weeks ended November 3, 2018 includes: 1) $53.7 million related to charges recorded in conjunction with the Company’s restructuring activities; 2) $160.4 million related to valuation losses associated with the sale of eligible non-prime in-house accounts receivable; and 3) $448.7 million related to goodwill and intangible impairments recognized in the first quarter.
|
|
|
|
|
(2)
|
Operating income (loss) during the 39 weeks ended November 3, 2018 includes $3.8 million related to inventory charges recorded in conjunction with the Company’s restructuring activities.
|
|
|
|
|
(3)
|
Operating income (loss) during the 13 and 39 weeks ended November 2, 2019 includes $9.2 million and $62.6 million, respectively, related to charges recorded in conjunction with the Company’s restructuring activities including inventory charges. Operating income (loss) during the 13 and 39 weeks ended November 3, 2018 includes $0.4 million and $7.0 million, respectively, related to transaction costs associated with the sale of the non-prime in-house accounts receivable, and $9.5 million and $41.3 million, respectively, related to charges recorded in conjunction with the Company’s restructuring activities including inventory charges.
|
For additional information on the items discussed above, see Note 5 related to the Company’s restructuring activities, Note 11 for details regarding the credit transaction and Note 14 regarding impairment charges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Total assets:
|
|
|
|
|
|
|
North America segment
|
$
|
5,313.5
|
|
|
$
|
3,943.0
|
|
|
$
|
4,428.6
|
|
|
International segment
|
577.0
|
|
|
367.4
|
|
|
387.1
|
|
|
Other
|
211.1
|
|
|
109.7
|
|
|
91.8
|
|
|
Total assets
|
$
|
6,101.6
|
|
|
$
|
4,420.1
|
|
|
$
|
4,907.5
|
|
5. Restructuring Plans
Signet Path to Brilliance Plan
During the first quarter of Fiscal 2019, Signet launched a three-year comprehensive transformation plan, the “Signet Path to Brilliance” plan (the “Plan”), to reposition the Company to be a share-gaining, OmniChannel jewelry category leader. The Plan is expected to result in pre-tax charges in the range of $200 million - $220 million over the duration of the plan of which $105 million - $115 million are expected to be cash charges.
Restructuring charges and other Plan related costs of $10.6 million and $65.2 million were recognized in the 13 and 39 weeks ended November 2, 2019, respectively, primarily related to store closure, severance costs and professional fees for legal and consulting services.
Restructuring charges and other Plan related costs are classified in the condensed consolidated statements of operations as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
Statement of operations caption
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Inventory charges
|
Restructuring charges - cost of sales
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
|
$
|
63.2
|
|
|
Other Plan related expenses
|
Restructuring charges
|
|
9.2
|
|
|
9.5
|
|
|
59.4
|
|
|
35.6
|
|
|
Total Signet Path to Brilliance Plan expenses
|
|
|
$
|
10.6
|
|
|
$
|
9.5
|
|
|
$
|
65.2
|
|
|
$
|
98.8
|
|
The composition of the restructuring charges the Company incurred during the 13 and 39 weeks ended November 2, 2019, as well as the cumulative amount incurred under the Plan through November 2, 2019, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
Cumulative amount
|
|
(in millions)
|
|
November 2, 2019
|
|
November 2, 2019
|
|
November 2, 2019
|
|
Inventory charges
|
|
$
|
1.4
|
|
|
$
|
5.8
|
|
|
$
|
68.0
|
|
|
Termination benefits
|
|
1.0
|
|
|
15.8
|
|
|
25.5
|
|
|
Store closure and other costs
|
|
8.2
|
|
|
43.6
|
|
|
97.6
|
|
|
Total Signet Path to Brilliance Plan expenses
|
|
$
|
10.6
|
|
|
$
|
65.2
|
|
|
$
|
191.1
|
|
The following table summarizes the activity related to the Plan liabilities for Fiscal 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Termination benefits
|
|
Store closure and other costs
|
|
Consolidated
|
|
Balance at February 2, 2019
|
|
$
|
—
|
|
|
$
|
12.6
|
|
|
$
|
12.6
|
|
|
Payments and other adjustments
|
|
(13.6
|
)
|
|
(53.1
|
)
|
|
(66.7
|
)
|
|
Charged to expense
|
|
15.8
|
|
|
49.4
|
|
|
65.2
|
|
|
Balance at November 2, 2019
|
|
$
|
2.2
|
|
|
$
|
8.9
|
|
|
$
|
11.1
|
|
6. Redeemable preferred shares
On October 5, 2016, the Company issued 625,000 shares of Series A Convertible Preference Shares (“preferred shares”) to certain affiliates of Leonard Green & Partners, L.P., for an aggregate purchase price of $625.0 million, or $1,000 per share (the “Stated Value”) pursuant to the investment agreement dated August 24, 2016. Preferred shareholders are entitled to a cumulative dividend at the rate of 5% per annum, payable quarterly in arrears. Refer to Note 7 for additional discussion of the Company’s dividends on preferred shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except conversion rate and conversion price)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Conversion rate
|
12.0578
|
|
|
11.3660
|
|
|
11.1190
|
|
|
Conversion price
|
$
|
82.9339
|
|
|
$
|
87.9817
|
|
|
$
|
89.9361
|
|
|
Potential impact of preferred shares if-converted to common shares
|
7.5
|
|
|
7.1
|
|
|
6.9
|
|
|
Liquidation preference
|
$
|
632.8
|
|
|
$
|
632.8
|
|
|
$
|
632.8
|
|
In connection with the issuance of the preferred shares, the Company incurred direct and incremental expenses of $13.7 million. These direct and incremental expenses originally reduced the preferred shares carrying value, and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date in November 2024. Accumulated accretion recorded in the condensed consolidated balance sheets was $5.2 million as of November 2, 2019 (February 2, 2019 and November 3, 2018: $4.0 million and $3.5 million, respectively).
Accretion of $0.4 million and $1.2 million was recorded to preferred shares in the condensed consolidated balance sheets during the 13 and 39 weeks ended November 2, 2019, respectively ($0.4 million and $1.2 million for the 13 and 39 weeks ended November 3, 2018, respectively).
7. Shareholders’ equity
Share repurchases
Common shares repurchased during the 39 weeks ended November 2, 2019 and November 3, 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 weeks ended November 2, 2019
|
|
39 weeks ended November 3, 2018
|
|
(in millions, except per share amounts)
|
Amount
authorized
|
|
Shares
repurchased
|
|
Amount
repurchased
|
|
Average
repurchase
price per
share
|
|
Shares
repurchased
|
|
Amount
repurchased
|
|
Average
repurchase
price per
share
|
|
2017 Program(1)
|
$
|
600.0
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
7.5
|
|
|
$
|
434.4
|
|
|
$
|
57.64
|
|
|
2016 Program(2)
|
$
|
1,375.0
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
1.3
|
|
|
$
|
50.6
|
|
|
$
|
39.76
|
|
|
Total
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
8.8
|
|
|
$
|
485.0
|
|
|
$
|
55.06
|
|
|
|
|
|
(1)
|
The 2017 Program had $165.6 million remaining as of November 2, 2019.
|
|
|
|
|
(2)
|
The 2016 Program was completed in March 2018.
|
Dividends on common shares
Dividends declared on common shares during the 39 weeks ended November 2, 2019 and November 3, 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2020
|
|
Fiscal 2019
|
|
(in millions, except per share amounts)
|
Cash dividend per share
|
|
Total
dividends
|
|
Cash dividend
per share
|
|
Total
dividends
|
|
First quarter
|
$
|
0.37
|
|
|
$
|
19.3
|
|
|
$
|
0.37
|
|
|
$
|
21.8
|
|
|
Second quarter
|
0.37
|
|
|
19.3
|
|
|
0.37
|
|
|
19.2
|
|
|
Third quarter(1)
|
0.37
|
|
|
19.4
|
|
|
0.37
|
|
|
19.2
|
|
|
Total
|
$
|
1.11
|
|
|
$
|
58.0
|
|
|
$
|
1.11
|
|
|
$
|
60.2
|
|
|
|
|
|
(1)
|
Signet’s dividend policy for common shares results in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of November 2, 2019 and November 3, 2018, $19.4 million and $19.2 million, respectively, has been recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the cash dividends on common shares declared for the third quarter of Fiscal 2020 and Fiscal 2019, respectively.
|
Dividends on preferred shares
Dividends declared on preferred shares during the 39 weeks ended November 2, 2019 and November 3, 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2020
|
|
Fiscal 2019
|
|
(in millions, except per share amounts)
|
Cash dividend
per share
|
|
Total cash
dividends
|
|
Cash dividend
per share
|
|
Total cash
dividends
|
|
First quarter
|
$
|
12.50
|
|
|
$
|
7.8
|
|
|
$
|
12.50
|
|
|
$
|
7.8
|
|
|
Second quarter
|
12.50
|
|
|
7.8
|
|
|
12.50
|
|
|
7.8
|
|
|
Third quarter(1)
|
12.50
|
|
|
7.8
|
|
|
12.50
|
|
|
7.8
|
|
|
Total
|
$
|
37.50
|
|
|
$
|
23.4
|
|
|
$
|
37.50
|
|
|
$
|
23.4
|
|
|
|
|
|
(1)
|
Signet’s preferred shares dividends result in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of November 2, 2019 and November 3, 2018, $7.8 million and $7.8 million, respectively, has been recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the cash dividends on preferred shares declared for the third quarter of Fiscal 2020 and Fiscal 2019, respectively.
|
There were no cumulative undeclared dividends on the preferred shares that reduced net income (loss) attributable to common shareholders during the 13 and 39 weeks ended November 2, 2019 or November 3, 2018. See Note 6 for additional discussion of the Company’s preferred shares.
8. Earnings (loss) per common share (“EPS”)
Basic EPS is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period. The computation of basic EPS is outlined in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions, except per share amounts)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders
|
$
|
(43.7
|
)
|
|
$
|
(38.1
|
)
|
|
$
|
(106.2
|
)
|
|
$
|
(574.1
|
)
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
51.8
|
|
|
51.5
|
|
|
51.7
|
|
|
55.7
|
|
|
EPS – basic
|
$
|
(0.84
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(2.05
|
)
|
|
$
|
(10.31
|
)
|
The dilutive effect of share awards represents the potential impact of outstanding awards issued under the Company’s share-based compensation plans, including restricted shares, restricted stock units and stock options issued under the Omnibus Plan and stock options issued under the Share Saving Plans. The dilutive effect of preferred shares represents the potential impact for common shares that would be issued upon conversion. Potential common share dilution related to share awards and preferred shares is determined using the treasury stock and if-converted methods, respectively. Under the if-converted method, the preferred shares are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted EPS calculation for the entire period being presented, only in the periods in which such effect is dilutive. Additionally, in periods in which preferred shares are dilutive, cumulative dividends and accretion for issuance costs associated with the preferred shares are added back to net income (loss) attributable to common shareholders. See Note 6 for additional discussion of the Company’s preferred shares.
The computation of diluted EPS is outlined in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions, except per share amounts)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders
|
$
|
(43.7
|
)
|
|
$
|
(38.1
|
)
|
|
$
|
(106.2
|
)
|
|
$
|
(574.1
|
)
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
51.8
|
|
|
51.5
|
|
|
51.7
|
|
|
55.7
|
|
|
EPS – diluted
|
$
|
(0.84
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(2.05
|
)
|
|
$
|
(10.31
|
)
|
The calculation of diluted EPS excludes the following items for each respective period on the basis that their effect would be anti-dilutive.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Share awards
|
1.3
|
|
|
0.2
|
|
|
1.3
|
|
|
0.2
|
|
|
Potential impact of preferred shares
|
7.4
|
|
|
6.9
|
|
|
7.2
|
|
|
6.9
|
|
|
Total anti-dilutive shares
|
8.7
|
|
|
7.1
|
|
|
8.5
|
|
|
7.1
|
|
9. Accumulated other comprehensive income (loss)
The following tables present the changes in AOCI by component and the reclassifications out of AOCI, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension plan
|
|
|
|
(in millions)
|
Foreign
currency
translation
|
|
Gains (losses) on available-for-sale securities, net
|
|
Gains (losses)
on cash flow
hedges
|
|
Actuarial
losses
|
|
Prior
service
credits
|
|
Accumulated
other
comprehensive
loss
|
|
Balance at February 2, 2019
|
$
|
(248.4
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
4.0
|
|
|
$
|
(53.8
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(302.8
|
)
|
|
Other comprehensive income (loss) (“OCI”) before reclassifications
|
(6.1
|
)
|
|
(0.2
|
)
|
|
8.6
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
Amounts reclassified from AOCI to net income
|
—
|
|
|
1.0
|
|
|
(0.8
|
)
|
|
0.7
|
|
|
0.1
|
|
|
1.0
|
|
|
Net current period OCI
|
(6.1
|
)
|
|
0.8
|
|
|
7.8
|
|
|
0.7
|
|
|
0.1
|
|
|
3.3
|
|
|
Balance at November 2, 2019
|
$
|
(254.5
|
)
|
|
$
|
0.3
|
|
|
$
|
11.8
|
|
|
$
|
(53.1
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
(299.5
|
)
|
The amounts reclassified from AOCI were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reclassified from AOCI
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
|
|
(in millions)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Statement of operations caption
|
|
Losses (gains) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
Foreign currency contracts
|
$
|
(0.3
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.9
|
)
|
|
$
|
0.9
|
|
|
Cost of sales (see Note 15)
|
|
Interest rate swaps
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
Interest expense, net
(see Note 15)
|
|
Commodity contracts
|
(0.2
|
)
|
|
(0.2
|
)
|
|
0.5
|
|
|
(1.1
|
)
|
|
Cost of sales (see Note 15)
|
|
Total before income tax
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(1.0
|
)
|
|
(1.5
|
)
|
|
|
|
Income taxes
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.5
|
|
|
|
|
Net of tax
|
(0.4
|
)
|
|
(0.5
|
)
|
|
(0.8
|
)
|
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit pension plan items:
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrecognized actuarial losses
|
0.2
|
|
|
0.3
|
|
|
0.8
|
|
|
0.6
|
|
|
Other non-operating income
|
|
Amortization of unrecognized net prior service credits
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
Other non-operating income
|
|
Total before income tax
|
0.3
|
|
|
0.3
|
|
|
0.9
|
|
|
0.6
|
|
|
|
|
Income taxes
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
|
|
Net of tax
|
0.3
|
|
|
0.2
|
|
|
0.8
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities items:
|
|
|
|
|
|
|
|
|
|
|
Corporate equity securities, before income tax
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
Other operating income, net
|
|
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Net of tax
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications, net of tax
|
$
|
0.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
1.0
|
|
|
$
|
(0.5
|
)
|
|
|
10. Income taxes
|
|
|
|
|
|
|
|
|
|
|
39 weeks ended
|
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Estimated annual effective tax rate before discrete items(1)
|
13.6
|
%
|
|
22.7
|
%
|
|
Discrete items recognized
|
(9.3
|
)%
|
|
(0.2
|
)%
|
|
Effective tax rate recognized in statement of operations
|
4.3
|
%
|
|
22.5
|
%
|
|
|
|
|
(1)
|
Fiscal 2019 effective tax rate computed based on actual tax rate for the 39 weeks ended November 3, 2018.
|
During the 39 weeks ended November 2, 2019, the Company’s effective tax rate was lower than the US federal income tax rate primarily due to the unfavorable impact of impairment of goodwill which was not deductible for tax purposes. The estimated annual effective tax rate excludes the effects of any discrete items that may be recognized in future periods.
As of November 2, 2019, there has been no material change in the amounts of unrecognized tax benefits, or the related accrued interest and penalties (where appropriate), in respect of uncertain tax positions identified and recorded as of February 2, 2019.
11. Accounts receivable
During Fiscal 2018, Signet announced a strategic initiative to outsource its North America private label credit card programs and sell the existing in-house finance receivables. In October 2017, Signet, through its subsidiary Sterling Jewelers Inc. (“Sterling”), completed the sale of the prime-only credit quality portion of Sterling’s in-house finance receivable portfolio to Comenity Bank (“Comenity”). In June 2018, the Company completed the sale of the non-prime in-house accounts receivable to CarVal Investors (“CarVal”) and the appointed minority party, Castlelake, L.P. (“Castlelake”).
In addition, for a five-year term, Signet will remain the issuer of non-prime credit with investment funds managed by CarVal and Castlelake purchasing forward receivables at a discount rate determined in accordance with their respective agreements. Signet will hold the newly issued non-prime credit receivables on its balance sheet for two business days prior to selling the receivables to the respective counterparty in accordance with the agreements. Receivables issued by the Company but pending transfer to CarVal and Castlelake as of period end are classified as “held for sale” and included in the accounts receivable caption in the condensed consolidated balance sheets. As of November 2, 2019, the accounts receivable, held for sale were recorded at fair value. See Note 16 for additional information regarding the assumptions utilized in the calculation of fair value of the finance receivables held for sale.
The following table presents the components of Signet’s accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Accounts receivable, held for investment
|
$
|
16.4
|
|
|
$
|
19.5
|
|
|
$
|
9.3
|
|
|
Accounts receivable, held for sale
|
4.4
|
|
|
4.2
|
|
|
4.8
|
|
|
Accounts receivable
|
$
|
20.8
|
|
|
$
|
23.7
|
|
|
$
|
14.1
|
|
In March 2018, the eligible non-prime in-house accounts receivables that met the criteria for sale were reclassified from "held for investment" to "held for sale" on the condensed consolidated balance sheet. Accordingly, the receivables were recorded at the lower of cost (par) or fair value as of the date of the reclassification with subsequent adjustments to the asset fair value as required through the closing date of the transaction. During the 39 weeks ended November 3, 2018, total valuation losses of $160.4 million were recorded within credit transaction, net in the condensed consolidated statement of operations. During the 13 and 39 weeks ended November 3, 2018, other transaction-related costs of $0.4 million and $7.0 million, respectively, were recorded within credit transaction, net in the condensed consolidated statement of operations.
Accounts receivable, held for investment is comprised primarily of accounts receivable related to the sale of diamonds from its polishing factory deemed unsuitable for Signet's needs in the Other segment.
12. Inventories
The following table summarizes the Company’s inventory by classification:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Raw materials
|
$
|
65.5
|
|
|
$
|
76.3
|
|
|
$
|
79.9
|
|
|
Finished goods
|
2,453.9
|
|
|
2,310.6
|
|
|
2,567.2
|
|
|
Total inventories
|
$
|
2,519.4
|
|
|
$
|
2,386.9
|
|
|
$
|
2,647.1
|
|
During the 39 weeks ended November 2, 2019, as a part of the “Signet Path to Brilliance” restructuring plan, the Company recorded inventory charges of $5.8 million primarily associated with discontinued brands and collections within the restructuring charges - cost of sales line item on the condensed consolidated statements of operations. During the 39 weeks ended November 3, 2018, the Company recorded inventory charges of $63.2 million as part of the “Signet Path to Brilliance” plan. See Note 5 for additional information.
As of November 2, 2019, inventory reserves were $81.6 million (February 2, 2019 and November 3, 2018: $95.3 million and $89.0 million, respectively).
13. Leases
Signet occupies certain properties and holds machinery and vehicles under operating leases. Signet determines if an arrangement is a lease at the agreement’s inception. Certain operating leases include predetermined rent increases, which are charged to store occupancy costs within cost of sales on a straight-line basis over the lease term, including any construction period or other rental holiday. Other variable amounts paid under operating leases, such as taxes and common area maintenance, are charged to selling, general and administrative expenses as incurred. Premiums paid to acquire short-term leasehold properties and inducements to enter into a lease are recognized on a straight-line basis over the lease term. In addition, certain leases provide for contingent rent based on a percentage of sales in excess of a predetermined level. Further, certain leases provide for variable rent increases based on indexes specified within the lease agreement. As the contingent rent and variable increases are not measurable at inception, the amounts are excluded from minimum rent and the calculation of the operating lease liability. These amounts are included in variable lease cost and included in the determination of total lease cost when it is probable that the expense has been incurred and the amount is reasonably estimable. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and non-current operating lease liabilities in the Company’s condensed consolidated balance sheets.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, Signet uses its incremental borrowing rate available at the lease commencement date, based primarily on the underlying lease term, in measuring the present value of lease payments. Lease terms, which include the period of the lease that can not be canceled, may also include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The operating lease ROU asset may also include initial direct costs, prepaid and/or accrued lease payments and the unamortized balance of lease incentives received. ROU assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with the Company’s long-lived asset impairment assessment policy.
Weighted average lease term and discount rate were as follows:
|
|
|
|
|
|
|
|
|
|
November 2, 2019
|
|
Weighted average remaining lease term (in years)
|
|
6.8
|
|
|
Weighted average discount rate
|
|
5.6
|
%
|
Total lease costs for operating leases are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
November 2, 2019
|
|
November 2, 2019
|
|
Operating lease cost
|
$
|
115.3
|
|
|
$
|
342.4
|
|
|
Short-term lease cost
|
4.0
|
|
|
15.2
|
|
|
Variable lease cost
|
10.0
|
|
|
64.0
|
|
|
Sublease income
|
(0.3
|
)
|
|
(1.2
|
)
|
|
Total lease cost
|
$
|
129.0
|
|
|
$
|
420.4
|
|
Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company’s condensed consolidated statement of cash flows. Payments representing costs to ready an ROU asset for its intended use are represented within investing activities within the Company’s condensed consolidated statements of cash flows.
Supplemental cash flow information related to leases was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
November 2, 2019
|
|
November 2, 2019
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
Operating cash flows from operating leases
|
$
|
83.4
|
|
|
$
|
313.3
|
|
|
Operating lease right-of-use assets obtained in exchange for lease obligations
|
29.6
|
|
|
70.4
|
|
The future minimum operating lease payments for operating leases having initial or non-cancelable terms in excess of one year are as follows:
|
|
|
|
|
|
|
|
|
(in millions)
|
|
November 2, 2019
|
|
Remainder of Fiscal 2020
|
|
$
|
116.4
|
|
|
Fiscal 2021
|
|
431.0
|
|
|
Fiscal 2022
|
|
374.9
|
|
|
Fiscal 2023
|
|
319.3
|
|
|
Fiscal 2024
|
|
252.5
|
|
|
Thereafter
|
|
725.8
|
|
|
Total minimum lease payments
|
|
$
|
2,219.9
|
|
|
Less: Imputed interest
|
|
(446.1
|
)
|
|
Present value of lease liabilities
|
|
$
|
1,773.8
|
|
In accordance with the prior guidance, ASC 840, Leases, the Company’s leases were previously designated as operating with no leases meeting the definition of capital leases. The designation of operating leases remains substantially unchanged under the new guidance. The future minimum lease payments by fiscal year as determined prior to the adoption of ASC 842, not including contingent rent, as disclosed in our Annual Report on Form 10-K for the fiscal year ended February 2, 2019, were as follows:
|
|
|
|
|
|
|
|
|
(in millions)
|
|
February 2, 2019
|
|
Fiscal 2020
|
|
$
|
450.4
|
|
|
Fiscal 2021
|
|
408.4
|
|
|
Fiscal 2022
|
|
361.1
|
|
|
Fiscal 2023
|
|
312.0
|
|
|
Fiscal 2024
|
|
247.4
|
|
|
Thereafter
|
|
755.2
|
|
|
Total
|
|
$
|
2,534.5
|
|
14. Goodwill and intangibles
Goodwill and other indefinite-lived intangible assets, such as indefinite-lived trade names, are evaluated for impairment annually. Additionally, if events or conditions were to indicate the carrying value of a reporting unit or an indefinite-lived intangible asset may be greater than its fair value, the Company would evaluate the asset for impairment at that time. Impairment testing compares the carrying amount of the reporting unit or other intangible assets with its fair value. When the carrying amount of the reporting unit or other intangible assets exceeds its fair value, an impairment charge is recorded.
Due to a sustained decline in the Company’s market capitalization during the 13 weeks ended May 5, 2018, the Company determined a triggering event had occurred that required an interim impairment assessment for all of its reporting units and indefinite-lived intangible assets. As part of the assessment, it was determined that an increase in the discount rate applied in the valuation was required to align with market-based assumptions and company-specific risk. This higher discount rate, in conjunction with revised long-term projections associated with finalizing certain initial aspects of the Company’s Path to Brilliance transformation plan, resulted in lower than previously projected long-term future cash flows for the reporting units which negatively affected the valuation compared to previous valuations. As a result of the interim impairment assessment, the Company recognized pre-tax impairment charges totaling $448.7 million in the 13 weeks ended May 5, 2018.
Due to a continued decline in the Company’s market capitalization during the 13 weeks ended February 2, 2019, the Company determined a triggering event had occurred that required additional interim impairment assessments for its reporting units and indefinite-lived intangible assets. The Company recognized additional pre-tax impairment charges totaling $286.7 million during the 13 weeks ended February 2, 2019 primarily related to revised long-term projections and a higher discount rate associated with James Allen.
Goodwill
During the first quarter of Fiscal 2019, the Company compared the fair value of each of its reporting units using a combination of discounted cash flow and guideline public company methodologies with their carrying value and concluded that a deficit existed. Accordingly, in the 13 weeks ended May 5, 2018, the Company recognized pre-tax impairment charges in operations of $308.8 million within its North America segment. Due to the second triggering event in the 13 weeks ended February 2, 2019 and using similar
methodologies as the initial impairment assessment, the Company recognized additional pre-tax impairment charges in operations of $208.8 million and $3.6 million within its North America and Other segments, respectively.
During the 13 weeks ended August 3, 2019, a non-cash immaterial out-of-period adjustment of $47.7 million, with $35.2 million related to Zales goodwill and $12.5 million related to R2Net goodwill, was recognized within Goodwill and intangible impairments on the condensed consolidated statements of operations related to an error in the calculation of goodwill impairments during Fiscal 2019.
The following table summarizes the Company’s goodwill by reportable segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
North America
|
|
Other
|
|
Total
|
|
Balance at February 3, 2018
|
|
$
|
818.1
|
|
|
$
|
3.6
|
|
|
$
|
821.7
|
|
|
Impairment
|
|
(517.6
|
)
|
|
(3.6
|
)
|
|
(521.2
|
)
|
|
Impact of foreign exchange and other adjustments (1)
|
|
(3.9
|
)
|
|
—
|
|
|
(3.9
|
)
|
|
Balance at February 2, 2019
|
|
296.6
|
|
|
—
|
|
|
296.6
|
|
|
Impairment(2)
|
|
(47.7
|
)
|
|
—
|
|
|
(47.7
|
)
|
|
Impact of foreign exchange and other adjustments
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
Balance at November 2, 2019
|
|
$
|
248.8
|
|
|
$
|
—
|
|
|
$
|
248.8
|
|
|
|
|
|
(1)
|
During Fiscal 2019, other adjustments include a purchase price accounting adjustment of $2.6 million related to a revised valuation of acquired intangible assets from the R2Net acquisition.
|
|
|
|
|
(2)
|
During the 39 weeks ended November 2, 2019, an immaterial out-of-period adjustment was recognized related to an error in the calculation of goodwill impairments during Fiscal 2019.
|
Intangibles
Definite-lived intangible assets include trade names and favorable lease agreements. All indefinite-lived intangible assets consist of trade names. Both definite and indefinite-lived assets are recorded within intangible assets, net, on the condensed consolidated balance sheets. Intangible liabilities, net, is comprised of unfavorable lease agreements and contracts and is recorded within other liabilities on the condensed consolidated balance sheets.
In conjunction with the interim goodwill impairment tests during Fiscal 2019, the Company reviewed its indefinite-lived intangible assets for potential impairment by calculating the fair values of the assets using the relief from royalty method and comparing the fair values to their respective carrying amounts. The interim impairment tests resulted in the determination that the fair values of indefinite-lived intangible assets related to certain Zales trade names were less than their carrying value. Accordingly, in the 13 weeks ended May 5, 2018, the Company recognized pre-tax impairment charges in operations of $139.9 million within its North America segment. Additionally, in conjunction with the interim goodwill impairment tests associated with the second triggering event in the fourth quarter of Fiscal 2019, the Company determined that the fair values of indefinite-lived intangible assets related to trade names, primarily James Allen, were less than their carrying value. Accordingly, in the 13 weeks ended February 2, 2019, the Company recognized pre-tax impairment charges in operations of $74.3 million within its North America segment.
The following table provides additional detail regarding the composition of intangible assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
(in millions)
|
|
Gross
carrying
amount
|
|
Accumulated
amortization(1)
|
|
Net
carrying
amount
|
|
Gross
carrying
amount
|
|
Accumulated
amortization(1)
|
|
Net
carrying
amount
|
|
Gross
carrying
amount
|
|
Accumulated
amortization(1)
|
|
Net
carrying
amount
|
|
Intangible assets, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Definite-lived intangible assets
|
|
$
|
53.2
|
|
|
$
|
(50.7
|
)
|
|
$
|
2.5
|
|
|
$
|
53.3
|
|
|
$
|
(50.1
|
)
|
|
$
|
3.2
|
|
|
$
|
53.3
|
|
|
$
|
(49.3
|
)
|
|
$
|
4.0
|
|
|
Indefinite-lived intangible assets
|
|
475.8
|
|
|
(214.1
|
)
|
|
261.7
|
|
|
475.9
|
|
|
(214.1
|
)
|
|
261.8
|
|
|
475.9
|
|
|
(139.7
|
)
|
|
336.2
|
|
|
Total intangible assets, net
|
|
$
|
529.0
|
|
|
$
|
(264.8
|
)
|
|
$
|
264.2
|
|
|
$
|
529.2
|
|
|
$
|
(264.2
|
)
|
|
$
|
265.0
|
|
|
$
|
529.2
|
|
|
$
|
(189.0
|
)
|
|
$
|
340.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible liabilities, net
|
|
$
|
(113.9
|
)
|
|
$
|
96.7
|
|
|
$
|
(17.2
|
)
|
|
$
|
(113.9
|
)
|
|
$
|
92.5
|
|
|
$
|
(21.4
|
)
|
|
$
|
(113.9
|
)
|
|
$
|
90.7
|
|
|
$
|
(23.2
|
)
|
|
|
|
|
(1)
|
Accumulated amortization amounts related to the indefinite-lived intangible assets represents accumulated impairment losses recorded to date.
|
During the second quarter of Fiscal 2020, the Company performed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names identified in the Zale acquisition, for impairment indicators. Additionally, due to a continued decline in the Company’s market capitalization during the second quarter of Fiscal 2020, the Company determined a triggering event had occurred requiring interim impairment assessments for its remaining reporting units with goodwill and indefinite-lived intangible assets. Using
methodologies similar to the assessments performed in Fiscal 2019 described above, the Company determined no additional impairment charges were required to be recognized during Fiscal 2020 related to the annual evaluation or interim assessment.
Based on management’s assessment during the third quarter of Fiscal 2020, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceed their fair values. The Company will continue to monitor the share price of the Company’s stock, as well as key business metrics and inputs used to estimate fair value, such as sales trends and interest rates.
As a result of the impairment of goodwill and tradenames during the fourth quarter of Fiscal 2019, goodwill of $77.8 million associated with the R2Net acquisition and the Company’s tradenames within the North America segment continue to approximate their respective fair values and could be at risk for future impairments.
15. Derivatives
Derivative transactions are used by Signet for risk management purposes to address risks inherent in Signet’s business operations and sources of financing. The main risks arising from Signet’s operations are market risk including foreign currency risk, commodity risk, liquidity risk and interest rate risk. Signet uses derivative financial instruments to manage and mitigate certain of these risks under policies reviewed and approved by the Board of Directors. Signet does not enter into derivative transactions for speculative purposes.
Market risk
Signet generates revenues and incurs expenses in US dollars, Canadian dollars and British pounds. As a portion of the International segment purchases and purchases made by the Canadian operations of the North America segment are denominated in US dollars, Signet enters into forward foreign currency exchange contracts and foreign currency swaps to manage this exposure to the US dollar.
Signet holds a fluctuating amount of British pounds and Canadian dollars reflecting the cash generative characteristics of operations. Signet’s objective is to minimize net foreign exchange exposure to the income statement on non-US dollar denominated items through managing cash levels, non-US dollar denominated intra-entity balances and foreign currency swaps. In order to manage the foreign exchange exposure and minimize the level of funds denominated in British pounds and Canadian dollars, dividends are paid regularly by subsidiaries to their immediate holding companies and excess British pounds and Canadian dollars are sold in exchange for US dollars.
Signet’s policy is to reduce the impact of precious metal commodity price volatility on operating results through the use of outright forward purchases of, or by entering into options to purchase, precious metals within treasury guidelines approved by the Board of Directors. In particular, Signet undertakes some hedging of its requirements for gold through the use of forward purchase contracts, options and net zero premium collar arrangements (a combination of forwards and option contracts).
Liquidity risk
Signet’s objective is to ensure that it has access to, or the ability to generate, sufficient cash from either internal or external sources in a timely and cost-effective manner to meet its commitments as they become due and payable. Signet manages liquidity risks as part of its overall risk management policy. Management produces forecasting and budgeting information that is reviewed and monitored by the Board of Directors. Cash generated from operations and external financing are the main sources of funding, which supplement Signet’s resources in meeting liquidity requirements.
The primary external sources of funding are an asset-based credit facility and senior unsecured notes as described in Note 17.
Interest rate risk
Signet has exposure to movements in interest rates associated with cash and borrowings. Signet may enter into various interest rate protection agreements in order to limit the impact of movements in interest rates.
Interest rate swap (designated) — The Company entered into an interest rate swap in March 2015 with an aggregate notional amount of $300.0 million that matured in April 2019. Under this contract, the Company agreed to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional amounts. This contract was entered into to reduce the consolidated interest rate risk associated with variable rate, long-term debt. The Company designated this derivative as a cash flow hedge of the variability in expected cash outflows for interest payments. During the term of the interest rate swap, the Company effectively converted a portion of its variable-rate senior unsecured term loan into fixed-rate debt.
Credit risk and concentrations of credit risk
Credit risk represents the loss that would be recognized at the reporting date if counterparties failed to perform as contracted. Signet does not anticipate non-performance by counterparties of its financial instruments. Signet does not require collateral or other security to support cash investments or financial instruments with credit risk; however, it is Signet’s policy to only hold cash and cash equivalent investments and to transact financial instruments with financial institutions with a certain minimum credit rating. As of November 2, 2019, management does not believe Signet is exposed to any significant concentrations of credit risk that arise from cash and cash equivalent investments, derivatives or accounts receivable.
Commodity and foreign currency risks
The following types of derivative financial instruments are utilized by Signet to mitigate certain risk exposures related to changes in commodity prices and foreign exchange rates:
Forward foreign currency exchange contracts (designated) — These contracts, which are principally in US dollars, are entered into to limit the impact of movements in foreign exchange rates on forecasted foreign currency purchases. The total notional amount of these foreign currency contracts outstanding as of November 2, 2019 was $25.0 million (February 2, 2019 and November 3, 2018: $22.4 million and $18.5 million, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 11 months (February 2, 2019 and November 3, 2018: 12 months and 12 months, respectively).
Forward foreign currency exchange contracts (undesignated) — Foreign currency contracts not designated as cash flow hedges are used to limit the impact of movements in foreign exchange rates on recognized foreign currency payables and to hedge currency flows through Signet’s bank accounts to mitigate Signet’s exposure to foreign currency exchange risk in its cash and borrowings. The total notional amount of these foreign currency contracts outstanding as of November 2, 2019 was $134.3 million (February 2, 2019 and November 3, 2018: $111.5 million and $90.2 million, respectively).
Commodity forward purchase contracts and net zero-cost collar arrangements (designated) — These contracts are entered into to reduce Signet’s exposure to significant movements in the price of the underlying precious metal raw materials. The total notional amount of these commodity derivative contracts outstanding as of November 2, 2019 was 75,000 ounces of gold (February 2, 2019 and November 3, 2018: 89,000 ounces and 111,000 ounces, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 14 months (February 2, 2019 and November 3, 2018: 20 months and 23 months, respectively).
The bank counterparties to the derivative instruments expose Signet to credit-related losses in the event of their non-performance. However, to mitigate that risk, Signet only contracts with counterparties that meet certain minimum requirements under its counterparty risk assessment process. As of November 2, 2019, Signet believes that this credit risk did not materially change the fair value of the foreign currency or commodity contracts.
The following table summarizes the fair value and presentation of derivative instruments in the condensed consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of derivative assets
|
|
(in millions)
|
Balance sheet location
|
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
Foreign currency contracts
|
Other current assets
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.5
|
|
|
Commodity contracts
|
Other current assets
|
|
9.8
|
|
|
4.3
|
|
|
0.1
|
|
|
Commodity contracts
|
Other assets
|
|
0.6
|
|
|
1.4
|
|
|
0.4
|
|
|
Interest rate swaps
|
Other assets
|
|
—
|
|
|
0.6
|
|
|
1.5
|
|
|
Total derivative assets
|
|
|
$
|
10.5
|
|
|
$
|
6.4
|
|
|
$
|
2.5
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
Foreign currency contracts
|
Other current assets
|
|
0.3
|
|
|
0.8
|
|
|
0.7
|
|
|
Total derivative assets
|
|
|
$
|
10.8
|
|
|
$
|
7.2
|
|
|
$
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of derivative liabilities
|
|
(in millions)
|
Balance sheet location
|
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
Foreign currency contracts
|
Other current liabilities
|
|
$
|
(0.9
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
Commodity contracts
|
Other current liabilities
|
|
(0.2
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
Total derivative liabilities
|
|
|
$
|
(1.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(1.3
|
)
|
Derivatives designated as cash flow hedges
The following table summarizes the pre-tax gains (losses) recorded in AOCI for derivatives designated in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Foreign currency contracts
|
$
|
(0.3
|
)
|
|
$
|
0.7
|
|
|
$
|
0.9
|
|
|
Commodity contracts
|
16.1
|
|
|
4.0
|
|
|
(1.9
|
)
|
|
Interest rate swaps
|
—
|
|
|
0.6
|
|
|
1.4
|
|
|
Gains (losses) recorded in AOCI
|
$
|
15.8
|
|
|
$
|
5.3
|
|
|
$
|
0.4
|
|
The following tables summarize the effect of derivative instruments designated as cash flow hedges in OCI and the condensed consolidated statement of operations:
Foreign currency contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
Statement of operations caption
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Gains (losses) recorded in AOCI, beginning of period
|
|
|
$
|
1.7
|
|
|
$
|
0.4
|
|
|
$
|
0.7
|
|
|
$
|
(2.4
|
)
|
|
Current period gains (losses) recognized in OCI
|
|
|
(1.7
|
)
|
|
0.3
|
|
|
(0.1
|
)
|
|
2.4
|
|
|
Losses (gains) reclassified from AOCI to net income
|
Cost of sales (1)
|
|
(0.3
|
)
|
|
0.2
|
|
|
(0.9
|
)
|
|
0.9
|
|
|
Gains (losses) recorded in AOCI, end of period
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.9
|
|
Commodity contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
Statement of operations caption
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Gains (losses) recorded in AOCI, beginning of period
|
|
|
$
|
11.2
|
|
|
$
|
(4.4
|
)
|
|
$
|
4.0
|
|
|
$
|
1.4
|
|
|
Current period gains (losses) recognized in OCI
|
|
|
5.1
|
|
|
2.7
|
|
|
11.6
|
|
|
(2.2
|
)
|
|
Losses (gains) reclassified from AOCI to net income
|
Cost of sales (1)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
0.5
|
|
|
(1.1
|
)
|
|
Gains (losses) recorded in AOCI, end of period
|
|
|
$
|
16.1
|
|
|
$
|
(1.9
|
)
|
|
$
|
16.1
|
|
|
$
|
(1.9
|
)
|
Interest rate swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
Statement of operations caption
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Gains recorded in AOCI, beginning of period
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
0.6
|
|
|
$
|
2.2
|
|
|
Current period gains (losses) recognized in OCI
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.5
|
|
|
(Gains) losses reclassified from AOCI to net income
|
Interest expense, net (1)
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
Gains recorded in AOCI, end of period
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
|
|
|
(1)
|
Refer to table below for total amounts of financial statement captions impacted by cash flow hedges.
|
Total amounts presented in the condensed consolidated statements of operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Cost of sales
|
|
$
|
(818.6
|
)
|
|
$
|
(820.5
|
)
|
|
$
|
(2,652.2
|
)
|
|
$
|
(2,746.2
|
)
|
|
Interest expense, net
|
|
$
|
(8.6
|
)
|
|
$
|
(10.6
|
)
|
|
$
|
(27.9
|
)
|
|
$
|
(28.9
|
)
|
There was no material ineffectiveness related to the Company’s derivative instruments designated in cash flow hedging relationships for the 13 weeks ended November 2, 2019 and November 3, 2018. Based on current valuations, the Company expects approximately $6.8 million of net pre-tax derivative gains to be reclassified out of AOCI into earnings within the next 12 months.
Derivatives not designated as hedging instruments
The following table presents the effects of the Company’s derivatives instruments not designated as cash flow hedges in the condensed consolidated statement of operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
Statement of operations caption
|
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Foreign currency contracts
|
Other operating income,
net
|
|
$
|
3.4
|
|
|
$
|
(1.8
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(12.3
|
)
|
16. Fair value measurement
The estimated fair value of Signet’s financial instruments held or issued to finance Signet’s operations is summarized below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that Signet would realize upon disposition nor do they indicate Signet’s intent or ability to dispose of the financial instrument. Assets and liabilities that are carried at fair value are required to be classified and disclosed in one of the following three categories:
Level 1—quoted market prices in active markets for identical assets and liabilities
Level 2—observable market based inputs or unobservable inputs that are corroborated by market data
Level 3—unobservable inputs that are not corroborated by market data
Signet determines fair value based upon quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The methods Signet uses to determine fair value on an instrument-specific basis are detailed below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
(in millions)
|
Carrying Value
|
|
Quoted prices in active markets for identical assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Carrying Value
|
|
Quoted prices in active markets for identical assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Carrying Value
|
|
Quoted prices in active markets for identical assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Treasury securities
|
$
|
7.2
|
|
|
$
|
7.2
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
Corporate equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
2.4
|
|
|
—
|
|
|
Foreign currency contracts
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
Commodity contracts
|
10.4
|
|
|
—
|
|
|
10.4
|
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
Interest rate swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
US government agency securities
|
4.9
|
|
|
—
|
|
|
4.9
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
Corporate bonds and notes
|
8.5
|
|
|
—
|
|
|
8.5
|
|
|
5.2
|
|
|
—
|
|
|
5.2
|
|
|
5.4
|
|
|
—
|
|
|
5.4
|
|
|
Total assets
|
$
|
31.4
|
|
|
$
|
7.2
|
|
|
$
|
24.2
|
|
|
$
|
22.0
|
|
|
$
|
7.1
|
|
|
$
|
14.9
|
|
|
$
|
18.5
|
|
|
$
|
7.4
|
|
|
$
|
11.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency contracts
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Commodity contracts
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
Total liabilities
|
$
|
(1.1
|
)
|
|
$
|
—
|
|
|
$
|
(1.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
|
$
|
(1.3
|
)
|
Investments in US Treasury securities and corporate equity securities are based on quoted market prices for identical instruments in active markets, and therefore were classified as Level 1 measurements in the fair value hierarchy. Investments in US government agency securities and corporate bonds and notes are based on quoted prices for similar instruments in active markets, and therefore were classified as Level 2 measurements in the fair value hierarchy. The fair value of derivative financial instruments has been determined based on market value equivalents at the balance sheet date, taking into account the current interest rate environment, foreign currency forward rates or
commodity forward rates, and therefore were classified as Level 2 measurements in the fair value hierarchy. See Note 15 for additional information related to the Company’s derivatives.
During the second quarter of Fiscal 2019, the Company completed the sale of all eligible non-prime in-house accounts receivable. Upon closing, 5% of the purchase price was deferred until the second anniversary of the closing date. Final payment of the deferred purchase price is contingent upon the non-prime portfolio achieving a pre-defined yield. The Company recorded an asset related to this deferred payment within other assets at fair value. This estimated fair value was derived from a discounted cash flow model using unobservable inputs, including estimated yields derived from historic performance, loss rates, payment rates and discount rates to estimate the fair value associated with the accounts receivable. The Company will adjust the asset to fair value through AOCI in each subsequent period through the performance period until settled. As of November 2, 2019, the fair value of the deferred payment was $21.0 million, which is recorded within other assets on the condensed consolidated balance sheets. See Note 11 for additional information.
Goodwill and other indefinite-lived intangible assets, are evaluated for impairment annually or more frequently if events or conditions were to indicate the carrying value of a reporting unit or an indefinite-lived intangible asset may be greater than its fair value. Impairment testing compares the carrying amount of the reporting unit or other intangible assets with its fair value. During the 13 weeks ended August 3, 2019, the Company performed an interim impairment test for goodwill and indefinite-lived intangible assets. The fair value was calculated using a combination of discounted cash flow and guideline public company methodologies for the reporting units and the relief from royalty method for the indefinite-lived intangible assets, respectively. The fair value of goodwill and indefinite-lived intangible assets is a Level 3 valuation based on certain unobservable inputs including projected cash flows and estimated risk-adjusted rates of return that would be utilized by market participants in valuing these assets or prices of similar assets. See Note 14 for additional information.
The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued expenses and other current liabilities, and income taxes approximate fair value because of the short-term maturity of these amounts.
The fair values of long-term debt instruments, excluding revolving credit facilities, were determined using quoted market prices in inactive markets or discounted cash flows based upon current observable market interest rates and therefore were classified as Level 2 measurements in the fair value hierarchy. The carrying value of the ABL Revolving Facility (as defined in Note 17) approximates fair value. The following table provides a summary of the carrying amount and fair value of outstanding debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
(in millions)
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior notes (Level 2)
|
$
|
146.3
|
|
|
$
|
139.3
|
|
|
$
|
395.3
|
|
|
$
|
340.3
|
|
|
$
|
395.1
|
|
|
$
|
377.8
|
|
|
Term loans (Level 2)
|
99.4
|
|
|
100.0
|
|
|
293.0
|
|
|
294.9
|
|
|
301.8
|
|
|
303.9
|
|
|
Total
|
$
|
245.7
|
|
|
$
|
239.3
|
|
|
$
|
688.3
|
|
|
$
|
635.2
|
|
|
$
|
696.9
|
|
|
$
|
681.7
|
|
17. Loans, overdrafts and long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Debt:
|
|
|
|
|
|
|
Senior unsecured notes due 2024, net of unamortized discount
|
$
|
147.5
|
|
|
$
|
399.0
|
|
|
$
|
399.0
|
|
|
ABL revolving facility
|
543.0
|
|
|
—
|
|
|
—
|
|
|
FILO term loan facility
|
100.0
|
|
|
—
|
|
|
—
|
|
|
Senior unsecured term loan
|
—
|
|
|
294.9
|
|
|
303.9
|
|
|
Revolving credit facility
|
—
|
|
|
—
|
|
|
282.0
|
|
|
Bank overdrafts
|
5.0
|
|
|
40.1
|
|
|
4.1
|
|
|
Total debt
|
$
|
795.5
|
|
|
$
|
734.0
|
|
|
$
|
989.0
|
|
|
Less: Current portion of loans and overdrafts
|
(5.0
|
)
|
|
(78.8
|
)
|
|
(322.6
|
)
|
|
Less: Unamortized debt issuance costs
|
(1.7
|
)
|
|
(5.6
|
)
|
|
(6.0
|
)
|
|
Total long-term debt
|
$
|
788.8
|
|
|
$
|
649.6
|
|
|
$
|
660.4
|
|
Revolving credit facility and term loan (the “Credit Facility”)
On September 27, 2019, in connection with the issuance of a new senior secured asset-based credit facility, the Company repaid and terminated the Credit Facility. Refer to the “Asset-based credit facility” section below. The original maturity of the Credit Facility was July 2021. Unamortized debt issuance costs of $2.0 million associated with the Credit Facility were written-off in the 13 and 39 week periods ended November 2, 2019 upon executing the termination of the Credit Facility. This expense was recognized as a cost of
extinguishment of the Credit Facility and was recorded within other non-operating income in the condensed consolidated statements of operations.
Senior unsecured notes due 2024
On May 19, 2014, Signet UK Finance plc (“Signet UK Finance”), a wholly owned subsidiary of the Company, issued $400 million aggregate principal amount of its 4.70% senior unsecured notes due in 2024 (the “Notes”). The Notes were issued under an effective registration statement previously filed with the SEC. The Notes are jointly and severally guaranteed, on a full and unconditional basis, by the Company and by certain of the Company’s wholly owned subsidiaries (such subsidiaries, the “Guarantors”). See Note 21 for additional information.
On September 5, 2019, Signet UK Finance announced the commencement of a tender offer to purchase any and all of its outstanding Notes (the “Tender Offer”). Upon receipt of the requisite consents from Note holders, Signet UK Finance entered into a supplemental indenture which eliminated most of the restrictive covenants and certain default provisions of the indenture. The supplemental indenture became operative on September 27, 2019 upon the Company’s acceptance and payment for the Notes previously validly tendered and not validly withdrawn pursuant to the Tender Offer for an aggregate of $239.6 million, which represented a purchase price of $950.00 per $1,000.00 in principal amount of the Notes validly tendered. The Company recognized a net gain on extinguishment of the validly tendered Notes in the 13 and 39 week periods ended November 2, 2019 of $8.7 million, net of $1.3 million in third party fees and $2.6 million in write-off of unamortized debt issuance costs and original issue discount. This net gain was recorded within other non-operating income in the condensed consolidated statements of operations.
Unamortized debt issuance costs relating to the Notes as of November 2, 2019 was $1.2 million (February 2, 2019 and November 3, 2018: $3.7 million and $3.9 million, respectively). The remaining unamortized debt issuance costs are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to debt issuance costs of $0.2 million and $0.5 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 39 weeks ended November 2, 2019, respectively ($0.2 million and $0.5 million for the 13 and 39 weeks ended November 3, 2018 respectively).
Asset-based credit facility
On September 27, 2019, the Company entered into a senior secured asset-based credit facility consisting of (i) a revolving credit facility in an aggregate committed amount of $1.5 billion (“ABL Revolving Facility”) and (ii) a first-in last-out term loan facility in an aggregate principal amount of $100.0 million (the “FILO Term Loan Facility” and, together with the ABL Revolving Facility, the “ABL Facility”) pursuant to that certain credit agreement. The ABL Facility will mature on September 27, 2024.
Revolving loans under the ABL Revolving Facility are available in an aggregate amount equal to the lesser of the aggregate ABL revolving commitments and a borrowing base determined based on the value of certain inventory and credit card receivables, subject to specified advance rates and reserves. Indebtedness under the ABL Facility is secured by substantially all of the assets of the Company and its subsidiaries, subject to customary exceptions. Borrowings under the ABL Revolving Facility and the FILO Term Loan Facility, as applicable, bear interest at the Company’s option at either eurocurrency rate plus the applicable margin or a base rate plus the applicable margin, in each case depending on the excess availability under the ABL Revolving Facility. The Company had stand-by letters of credit outstanding of $15.5 million on the ABL Revolving Facility as of November 2, 2019. The Company had available borrowing capacity of $871.2 million on the ABL Revolving Facility as of November 2, 2019.
If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures. The ABL Facility contains customary events of default (including payment defaults, cross-defaults to certain of our other indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Facility.
Debt issuance costs relating to the ABL Facility totaled $9.0 million, of which $8.4 million of these costs were allocated to the ABL Revolving Facility and $0.6 million was allocated to the FILO Term Loan Facility. The remaining unamortized debt issuance costs for the ABL Revolving Facility are recorded within other assets in the condensed consolidated balance sheets and the remaining unamortized debt issuance costs for the FILO Term Loan Facility are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to the ABL Facility debt issuance costs of $0.1 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 39 weeks ended November 2, 2019.
Other
As of November 2, 2019, February 2, 2019 and November 3, 2018, the Company was in compliance with all debt covenants.
18. Warranty reserve
Specific merchandise sold by banners within the North America segment includes a product lifetime diamond or colored gemstone guarantee as long as six-month inspections are performed and certified by an authorized store representative. Provided the customer has complied with the six-month inspection policy, the Company will replace, at no cost to the customer, any stone that chips, breaks or is lost from its original setting during normal wear. Management estimates the warranty accrual based on the lag of actual claims experience and the costs of such claims, inclusive of labor and material. The warranty reserve for diamond and gemstone guarantee, included in accrued expenses and other current liabilities and other non-current liabilities, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
39 weeks ended
|
|
(in millions)
|
November 2, 2019
|
|
November 3, 2018
|
|
November 2, 2019
|
|
November 3, 2018
|
|
Warranty reserve, beginning of period
|
$
|
34.1
|
|
|
$
|
36.4
|
|
|
$
|
33.2
|
|
|
$
|
37.2
|
|
|
Warranty expense
|
5.4
|
|
|
0.7
|
|
|
11.4
|
|
|
6.1
|
|
|
Utilized(1)
|
(3.0
|
)
|
|
(2.8
|
)
|
|
(8.1
|
)
|
|
(9.0
|
)
|
|
Warranty reserve, end of period
|
$
|
36.5
|
|
|
$
|
34.3
|
|
|
$
|
36.5
|
|
|
$
|
34.3
|
|
|
|
|
|
(1)
|
Includes impact of foreign exchange translation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
November 2, 2019
|
|
February 2, 2019
|
|
November 3, 2018
|
|
Disclosed as:
|
|
|
|
|
|
|
Current liabilities
|
$
|
10.8
|
|
|
$
|
10.0
|
|
|
$
|
10.4
|
|
|
Non-current liabilities
|
25.7
|
|
|
23.2
|
|
|
23.9
|
|
|
Total warranty reserve
|
$
|
36.5
|
|
|
$
|
33.2
|
|
|
$
|
34.3
|
|
19. Share-based compensation
Signet recorded share-based compensation expense of $4.7 million and $13.0 million for the 13 and 39 weeks ended November 2, 2019, respectively, related to the Omnibus Plan and Share Saving Plans ($7.3 million and $15.5 million for the 13 and 39 weeks ended November 3, 2018, respectively).
20. Commitments and contingencies
Legal proceedings
Employment practices
As previously reported, in March 2008, a group of private plaintiffs (the “Claimants”) filed a class action lawsuit for an unspecified amount against SJI, a subsidiary of Signet, in the US District Court for the Southern District of New York alleging that US store-level employment practices are discriminatory as to compensation and promotional activities with respect to gender. In June 2008, the District Court referred the matter to private arbitration where the Claimants sought to proceed on a class-wide basis. The Claimants filed a motion for class certification and SJI opposed the motion. On February 2, 2015, the arbitrator issued a Class Determination Award in which she certified for a class-wide hearing Claimants’ disparate impact declaratory and injunctive relief class claim under Title VII, with a class period of July 22, 2004 through date of trial for the Claimants’ compensation claims and December 7, 2004 through date of trial for Claimants’ promotion claims. The arbitrator otherwise denied Claimants’ motion to certify a disparate treatment class alleged under Title VII, denied a disparate impact monetary damages class alleged under Title VII, and denied an opt-out monetary damages class under the Equal Pay Act. On February 9, 2015, Claimants filed an Emergency Motion To Restrict Communications With The Certified Class And For Corrective Notice. SJI filed its opposition to Claimants’ emergency motion on February 17, 2015, and a hearing was held on February 18, 2015. Claimants’ motion was granted in part and denied in part in an order issued on March 16, 2015. Claimants filed a Motion for Reconsideration Regarding Title VII Claims for Disparate Treatment in Compensation on February 11, 2015, which SJI opposed. April 27, 2015, the arbitrator issued an order denying the Claimants’ Motion. SJI filed with the US District Court for the Southern District of New York a Motion to Vacate the Arbitrator’s Class Certification Award on March 3, 2015, which Claimants opposed. On November 16, 2015, the US District Court for the Southern District of New York granted SJI’s Motion to Vacate the Arbitrator’s Class Certification Award in part and denied it in part. On December 3, 2015, SJI filed with the United States Court of Appeals for the Second Circuit SJI’s Notice of Appeal of the District Court’s November 16, 2015 Opinion and Order. On November 25, 2015, SJI filed a Motion to Stay the AAA Proceedings while SJI appeals the decision of the US District Court for the Southern District of New York to the United States Court of Appeals for the Second Circuit, which Claimants opposed. The arbitrator issued an order denying SJI’s Motion to Stay on February 22, 2016.SJI filed its Brief and Special Appendix with the Second Circuit on March 16, 2016. The matter was fully briefed, and oral argument was heard by the U.S. Court of Appeals for the Second Circuit on November 2, 2016. On April 6, 2015, Claimants filed in the AAA Claimants’ Motion for Clarification or in the Alternative Motion for Stay of the Effect of the Class Certification Award
as to the Individual Intentional Discrimination Claims, which SJI opposed. On June 15, 2015, the arbitrator granted the Claimants’ motion. On March 6, 2017, Claimants filed Claimants’ Motion for Conditional Certification of Claimants’ Equal Pay Act Claims and Authorization of Notice, which SJI opposed The arbitrator heard oral argument on Claimants’ Motion on December 18, 2015 and, on February 29, 2016, issued an Equal Pay Act Collective Action Conditional Certification Award and Order Re Claimants’ Motion For Tolling Of EPA Limitations Period, conditionally certifying Claimants’ Equal Pay Act claims as a collective action, and tolling the statute of limitations on EPA claims to October 16, 2003 to ninety days after notice issues to the putative members of the collective action. SJI filed in the AAA a Motion To Stay Arbitration Pending The District Court’s Consideration Of Respondent’s Motion To Vacate Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period on March 10, 2016. SJI filed in the AAA a Renewed Motion To Stay Arbitration Pending The District Court’s Resolution Of Sterling’s Motion To Vacate Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period on March 31, 2016, which Claimants opposed. On April 5, 2016, the arbitrator denied SJI’s Motion. On March 23, 2016 SJI filed with the US District Court for the Southern District of New York a Motion To Vacate The Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period, which Claimants opposed. SJI’s Motion was denied on May 22, 2016. On May 31, 2016, SJI filed a Notice Of Appeal of Judge Rakoff’s opinion and order to the Second Circuit Court of Appeals, which Claimant’s opposed. On June 1, 2017, the Second Circuit Court of Appeals dismissed SJI’s appeal for lack of appellate jurisdiction. Claimants filed a Motion For Amended Class Determination Award on November 18, 2015, and on March 31, 2016 the arbitrator entered an order amending the Title VII class certification award to preclude class members from requesting exclusion from the injunctive and declaratory relief class certified in the arbitration. The arbitrator issued a Bifurcated Case Management Plan on April 5, 2016 and ordered into effect the parties’ Stipulation Regarding Notice Of Equal Pay Act Collective Action And Related Notice Administrative Procedures on April 7, 2016. SJI filed in the AAA a Motion For Protective Order on May 2, 2016, which Claimants opposed. The matter was fully briefed, and oral argument was heard on July 22, 2016. The motion was granted in part on January 27, 2017. Notice to EPA collective action members was issued on May 3, 2016, and the opt-in period for these notice recipients closed on August 1, 2016. Approximately, 10,314 current and former employees submitted consent forms to opt in to the collective action; however, some have withdrawn their consents. The number of valid consents is disputed and yet to be determined. SJI believes the number of valid consents to be approximately 9,124. On July 24, 2017, the United States Court of Appeals for the Second Circuit issued its unanimous Summary Order that held that the absent class members “never consented” to the Arbitrator determining the permissibility of class arbitration under the agreements, and remanded the matter to the District Court to determine whether the Arbitrator exceeded her authority by certifying the Title VII class that contained absent class members who had not opted in the litigation. On August 7, 2017, SJI filed its Renewed Motion to Vacate the Class Determination Award relative to absent class members with the District Court. The matter was fully briefed, and an oral argument was heard on October 16, 2017. On November 10, 2017, SJI filed in the arbitration motions for summary judgment, and for decertification, of Claimants’ Equal Pay Act and Title VII promotions claims. On January 30, 2018, oral argument on SJI’s motions was heard. On January 26, 2018, SJI filed in the arbitration a Motion to Vacate The Equal Pay Act Collective Action Award And Tolling Order asserting that the Arbitrator exceeded her authority by conditionally certifying the Equal Pay Act claim and allowing the absent claimants to opt-in the litigation. On March 12, 2018, the Arbitrator denied SJI’s Motion to Vacate The Equal Pay Act Collective Action Award and Tolling Order. SJI still has a pending motion seeking decertification of the EPA Collective Action before the Arbitrator. On March 19, 2018, the Arbitrator issued an Order partially granting SJI’s Motion to Amend the Arbitrator’s November 2, 2017, Bifurcated Seventh Amended Case Management Plan resulting in a continuance of the May 14, 2018 trial date. A new trial date has not been set. On January 15, 2018, District Court granted SJI’s August 17, 2017 Renewed Motion to Vacate the Class Determination Award finding that the Arbitrator exceeded her authority by binding non-parties (absent class members) to the Title VII claim. The District Court further held that the RESOLVE Agreement does not permit class action procedures, thereby, reducing the Claimants in the Title VII matter from 70,000 to potentially 254. Claimants dispute that the number of claimants in the Title VII is 254. On January 18, 2018, the Claimants filed a Notice of Appeal with the United States Court of Appeals for the Second Circuit. The appeal was fully briefed and oral argument before the Second Circuit occurred on May 7, 2018. On May 17, 2019, SJI submitted a Rule 28(j) letter to the Second Circuit addressing the effects of the Supreme Court’s ruling in Lamps Plus, Inc. v. Varela, No. 17-988 (S. Ct. Apr. 24, 2019), on the pending appeal. The Second Circuit then issued an order directing the parties to submit additional arguments on that issue, which were submitted. On November 18, 2019 the Second Circuit issued an order reversing and remanding the District Court’s January 15, 2018 Order that vacated the Arbitrator’s Class Determination Award certifying for declaratory and injunctive relief a Title VII pay and promotions class of female retail sales employees. The Second Circuit held that the District Court erred when it concluded that the Arbitrator exceeded her authority in purporting to bind absent class members to the Class Determination Award. The Second Circuit remanded the case to the District Court to decide the narrower question of whether the Arbitrator erred in certifying an opt-out, as opposed to a mandatory, class for declaratory and injunctive relief. On December 2, 2019, SJI filed a petition for a hearing en banc with the United States Court of Appeals for the Second Circuit.
SJI denies the allegations of the Claimants and has been defending the case vigorously. At this point, no outcome or possible loss or range of losses, if any, arising from the litigation is able to be estimated.
Also, as previously reported, on September 23, 2008, the US Equal Employment Opportunity Commission (“EEOC”) filed a lawsuit against SJI in the US District Court for the Western District of New York. This suit was settled on May 5, 2017, as further described below. The EEOC’s lawsuit alleged that SJI engaged in intentional and disparate impact gender discrimination with respect to pay and promotions of female retail store employees from January 1, 2003 to the present. The EEOC asserted claims for unspecified monetary
relief and non-monetary relief against the Company on behalf of a class of female employees subjected to these alleged practices. Non-expert fact discovery closed in mid-May 2013. In September 2013, SJI made a motion for partial summary judgment on procedural grounds, which was referred to a Magistrate Judge. The Magistrate Judge heard oral arguments on the summary judgment motion in December 2013. On January 2, 2014, the Magistrate Judge issued his Report, Recommendation and Order, recommending that the Court grant SJI’s motion for partial summary judgment and dismiss the EEOC’s claims in their entirety. The EEOC filed its objections to the Magistrate Judge’s ruling and SJI filed its response thereto. The District Court Judge heard oral arguments on the EEOC’s objections to the Magistrate Judge’s ruling on March 7, 2014 and on March 11, 2014 entered an order dismissing the action with prejudice. On May 12, 2014, the EEOC filed its Notice of Appeal of the District Court Judge’s dismissal of the action to United States Court of Appeals for the Second Circuit. The parties fully briefed the appeal and oral argument occurred on May 5, 2015. On September 9, 2015, the United States Court of Appeals for the Second Circuit issued a decision vacating the District Court’s order and remanding the case back to the District Court for further proceedings. SJI filed a Petition for Panel Rehearing and En Banc Review with the United States Court of Appeals for the Second Circuit, which was denied on December 1, 2015. On December 4, 2015, SJI filed in the United States Court of Appeals for the Second Circuit a Motion Of Appellee Sterling Jewelers Inc. For Stay Of Mandate Pending Petition For Writ Of Certiorari. The Motion was granted by the Second Circuit on December 10, 2015. SJI filed a Petition For Writ Of Certiorari in the Supreme Court of the United States on April 29, 2016, which was denied. The case was remanded to the Western District of New York and on November 2, 2016, the Court issued a case scheduling order. On January 25, 2017, the parties filed a joint motion to extend case scheduling order deadlines. The motion was granted on January 27, 2017. On May 5, 2017 the U.S. District Court for the Western District of New York approved and entered the Consent Decree jointly proposed by the EEOC and SJI, resolving all of the EEOC’s claims against SJI in this litigation for various injunctive relief including but not limited to the appointment of an employment practices expert to review specific policies and practices, a compliance officer to be employed by SJI, as well as obligations relative to training, notices, reporting and record-keeping. The Consent Decree does not require an outside third-party monitor or require any monetary payment. The duration of the Consent Decree is three years and three months, expiring on August 4, 2020.
Shareholder Actions
In August 2016, two alleged Company shareholders each filed a putative class action complaint in the United States District Court for the Southern District of New York against the Company and its then-current Chief Executive Officer and current Chief Financial Officer (Nos. 16-cv-6728 and 16-cv-6861, the “S.D.N.Y. cases”). On September 16, 2016, the Court consolidated the S.D.N.Y. cases under case number 16-cv-6728. On April 3, 2017, the plaintiffs filed a second amended complaint, purportedly on behalf of persons that acquired the Company’s securities on or between August 29, 2013, and February 27, 2017, naming as defendants the Company, its then-current and former Chief Executive Officers, and its current and former Chief Financial Officers. The second amended complaint alleged that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, misrepresenting the Company’s business and earnings by (i) failing to disclose that the Company was allegedly having issues ensuring the safety of customers’ jewelry while in the Company’s custody for repairs, which allegedly damaged customer confidence; (ii) making misleading statements about the Company’s credit portfolio; and (iii) failing to disclose reports of sexual harassment allegations that were raised by claimants in an ongoing pay and promotion gender discrimination class arbitration (the “Arbitration”). The second amended complaint alleged that the Company’s share price was artificially inflated as a result of the alleged misrepresentations and sought unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees.
In March 2017, two other alleged Company shareholders each filed a putative class action complaint in the United States District Court for the Northern District of Texas against the Company and its then-current and former Chief Executive Officers (Nos. 17-cv-875 and 17-cv-923, the “N.D. Tex. cases”). Those complaints were nearly identical to each other and alleged that the defendants’ statements concerning the Arbitration violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The N.D. Tex. cases were subsequently transferred to the Southern District of New York and consolidated with the S.D.N.Y. cases (the “Consolidated Action”). On July 27, 2017, the Court appointed a lead plaintiff and lead plaintiff’s counsel in the Consolidated Action. On August 3, 2017, the Court ordered the lead plaintiff in the Consolidated Action to file a third amended complaint by September 29, 2017. On September 29, 2017, the lead plaintiff filed a third amended complaint that covered a putative class period of August 29, 2013, through May 24, 2017, and that asserted substantially similar claims to the second amended complaint, except that it omitted the claim based on defendants’ alleged misstatements concerning the security of customers’ jewelry while in the Company’s custody for repairs. The defendants moved to dismiss the third amended complaint on December 1, 2017. On December 4, 2017, the Court entered an order permitting the lead plaintiff to amend its complaint as of right by December 22, 2017, and providing that the lead plaintiff would not be given any further opportunity to amend its complaint to address the issues raised in the defendants’ motion to dismiss.
On December 15, 2017, another alleged Company shareholder filed a putative class action complaint in the United States District Court for the Southern District of New York against the Company and its current Chief Executive Officer and Chief Financial Officer (No. 17-cv-9853). This complaint alleged that the defendants made misleading statements regarding the Company’s credit portfolio between August 24, 2017, and November 21, 2017, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and sought unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees. On January 7, 2018, this case was consolidated into the Consolidated Action.
On December 22, 2017, the lead plaintiff in the Consolidated Action filed its fourth amended complaint, which asserted substantially the same claims as its third amended complaint for an expanded class period of August 28, 2013, through December 1, 2017. On January 26, 2017, the defendants moved to dismiss the fourth amended complaint. This motion was fully briefed as of March 9, 2018.
On March 20, 2018, the Court granted the lead plaintiff leave to file a fifth amended complaint. On March 22, 2018, the lead plaintiff in the Consolidated Action filed its fifth amended complaint which asserts substantially the same claims as its fourth amended complaint for an expanded class period of August 29, 2013, through March 13, 2018. The prior motion to dismiss was denied as moot. On March 30, 2018, the defendants moved to dismiss the fifth amended complaint. On November 26, 2018, the Court denied the defendants’ motion to dismiss.
On March 15, 2019, the lead plaintiff moved for appointment of a class representative and class counsel and for certification of a class period of August 29, 2013, through March 13, 2018. On July 10, 2019, the Court granted the motion and certified a class of all persons and entities who purchased or otherwise acquired Signet common stock from August 29, 2013 to May 25, 2017. The Court also appointed a class representative and class counsel.
On May 9, 2019, the defendants moved for judgment on the pleadings with respect to certain alleged misstatements. On June 11, 2019, the Court denied the defendants’ motion for judgment on the pleadings. The defendants moved for reconsideration on June 18, 2019. The Court denied that motion on June 20, 2019.
On July 24, 2019, the defendants filed with the United States Court of Appeals for the Second Circuit a petition for permission to appeal the District Court’s class certification decision. On November 19, 2019, the Court of Appeals granted that petition. On November 20, 2019, the parties jointly moved to stay proceedings in the District Court while the appeal is pending. On November 21, 2019, the District Court granted that motion.
On March 27, 2019, two actions were filed in the U.S. District Court for the Southern District of New York by investment funds that allegedly purchased the Company’s stock (Nos. 19-cv-2757 and 19-cv-2758), and name the Company and its current and former Chief Executive Officers and Chief Financial Officers as defendants. Both complaints allege violations of Sections 10(b), 18, and 20(a) of the Securities Exchange Act of 1934, and common law fraud, based on alleged misstatements and omissions concerning the Company’s credit portfolio. These claims are substantially the same as the credit-related claims in the Consolidated Action, except that No. 19-cv-2757 alleges a “relevant period” of August 29, 2013, to June 2, 2016, and No. 19-cv-2758 alleges a “relevant period” of August 29, 2013, to August 25, 2016. On May 14, 2019, and May 29, 2019, the Court entered orders staying these actions until entry of final judgment in the Consolidated Action.
On October 25, 2019, two more actions were filed in the U.S. District Court for the Southern District of New York by investment funds that allegedly purchased the Company’s stock (Nos. 19-cv-9916 and 19-cv-9917), and name the Company and its current and former Chief Executive Officers and Chief Financial Officers as defendants. Both complaints allege violations of Sections 10(b), 18, and 20(a) of the Securities Exchange Act of 1934, and common law fraud. The claims in No. 19-cv-9916 are substantially the same as the claims in the Consolidated Action related to the Company’s alleged failure to disclose reports of sexual harassment allegations that were raised by claimants in the Arbitration, except that No. 19-cv-9916 alleges a “relevant period” of December 2, 2016, to February 1, 2017. The claims in No. 19-cv-9917 are substantially the same as the claims in the Consolidated Action, except that No. 19-cv-9917 alleges a “relevant period” of August 28, 2014, to March 16, 2017. On November 5, 2019, the Court entered orders staying these actions until entry of final judgment in the Consolidated Action.
Derivative Action
On September 1, 2017, Josanne Aungst filed a putative shareholder derivative action entitled Aungst v. Light, et al., No. CV-2017-3665, in the Court of Common Pleas for Summit County Ohio. The complaint in this action, which purports to have been brought by Ms. Aungst on behalf of the Company, names certain current and former directors and officers of the Company as defendants and alleges claims for breach of fiduciary duty, abuse of control, and gross mismanagement. The complaint challenges certain public disclosures and conduct relating to the allegations that were raised by the claimants in the Arbitration. The complaint also alleges that the Company’s share price was artificially inflated as a result of alleged misrepresentations and omissions. The complaint seeks money damages on behalf of the Company, changes to the Company’s corporate governance, and other equitable relief, as well as plaintiff’s legal fees and costs. The defendants’ motion to dismiss the complaint was granted on February 28, 2019. On March 26, 2019, plaintiff filed a notice of appeal of the trial court’s dismissal of the action. On July 1, 2019, plaintiff filed an appeal brief in the Court of Appeals, Ninth Judicial District, Summit County, Ohio. Defendants filed their answering brief on August 9, 2019. Plaintiff filed a reply brief on August 19, 2019. The Court of Appeals scheduled oral argument on plaintiff’s appeal for January 7, 2020.
The Company believes that the claims brought in these shareholder actions are without merit and cannot estimate a range of potential liability, if any, at this time.
Regulatory Matters
On January 16, 2019, Sterling Jewelers Inc., (“Sterling”), a wholly owned subsidiary of Company, without admitting or denying any of the allegations, findings of fact, or conclusions of law (except to establish jurisdiction), entered into a Consent Order with the Consumer Financial Protection Bureau (the "CFPB") and New York Attorney General (the “NY AG”) settling a previously disclosed investigation of certain in-store credit practices, promotions, and payment protection products (the "Consent Order"). Among other things, the Consent Order requires Sterling to (i) submit an accurate written compliance report to the CFPB; (ii) pay an $10,000,000 civil money penalty to the CFPB; (iii) pay a $1,000,000 civil money penalty to the NY AG: and (iv) maintain policies and procedures related to the issuance of credit cards, including with respect to credit applications, credit financing terms and conditions, and any related add-on products that are reasonably designed to ensure consumer knowledge or consent. All payments required by the Consent Order were made in February 2019. We continue to work to ensure compliance with the Consent Order, which may result in us incurring additional costs. See Item 1A of Signet’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019 filed with the SEC on April 3, 2019 for risks relating to the CFPB and our continued compliance with the Consent Order.
21. Condensed consolidating financial information
The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” Signet and certain of its subsidiaries have guaranteed the obligations under certain debt securities that have been issued by Signet UK Finance plc. The following presents the condensed consolidating financial information for: (i) the indirect Parent Company (Signet Jewelers Limited); (ii) the Issuer of the guaranteed obligations (Signet UK Finance plc); (iii) the Guarantor subsidiaries, on a combined basis; (iv) the non-guarantor subsidiaries, on a combined basis; (v) consolidating eliminations and (vi) Signet Jewelers Limited and Subsidiaries on a consolidated basis. Each Guarantor subsidiary is 100% owned by the Parent Company at the date of each balance sheet presented. The Guarantor subsidiaries, along with Signet Jewelers Limited, will fully and unconditionally guarantee the obligations of Signet UK Finance plc under any such debt securities. Each entity in the consolidating financial information follows the same accounting policies as described in the condensed consolidated financial statements.
The accompanying condensed consolidating financial information has been presented on the equity method of accounting for all periods presented. Under this method, investments in subsidiaries are recorded at cost and adjusted for the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries include consolidating and eliminating entries for investments in subsidiaries and intra-entity activity and balances.
Condensed Consolidating Statement of Operations
For the 13 weeks ended November 2, 2019
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,074.4
|
|
|
$
|
113.3
|
|
|
$
|
—
|
|
|
$
|
1,187.7
|
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
(746.5
|
)
|
|
(72.1
|
)
|
|
—
|
|
|
(818.6
|
)
|
|
Restructuring charges - cost of sales
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
Gross margin
|
—
|
|
|
—
|
|
|
327.0
|
|
|
40.7
|
|
|
—
|
|
|
367.7
|
|
|
Selling, general and administrative expenses
|
(0.2
|
)
|
|
—
|
|
|
(387.3
|
)
|
|
(10.9
|
)
|
|
—
|
|
|
(398.4
|
)
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
(8.4
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(9.2
|
)
|
|
Other operating income (loss), net
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
Operating income (loss)
|
(0.2
|
)
|
|
—
|
|
|
(68.8
|
)
|
|
29.1
|
|
|
—
|
|
|
(39.9
|
)
|
|
Intra-entity interest income (expense)
|
(0.4
|
)
|
|
3.7
|
|
|
(44.7
|
)
|
|
41.4
|
|
|
—
|
|
|
—
|
|
|
Interest expense, net
|
—
|
|
|
(3.8
|
)
|
|
(5.4
|
)
|
|
0.6
|
|
|
—
|
|
|
(8.6
|
)
|
|
Other non-operating income (loss), net
|
—
|
|
|
8.8
|
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
Income (loss) before income taxes
|
(0.6
|
)
|
|
8.7
|
|
|
(120.7
|
)
|
|
71.1
|
|
|
—
|
|
|
(41.5
|
)
|
|
Income taxes
|
—
|
|
|
(1.7
|
)
|
|
15.4
|
|
|
(7.7
|
)
|
|
—
|
|
|
6.0
|
|
|
Equity in income (loss) of subsidiaries
|
(34.9
|
)
|
|
—
|
|
|
(90.4
|
)
|
|
(90.9
|
)
|
|
216.2
|
|
|
—
|
|
|
Net income (loss)
|
$
|
(35.5
|
)
|
|
$
|
7.0
|
|
|
$
|
(195.7
|
)
|
|
$
|
(27.5
|
)
|
|
$
|
216.2
|
|
|
$
|
(35.5
|
)
|
|
Dividends on redeemable convertible preferred shares
|
(8.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.2
|
)
|
|
Net income (loss) attributable to common shareholders
|
$
|
(43.7
|
)
|
|
$
|
7.0
|
|
|
$
|
(195.7
|
)
|
|
$
|
(27.5
|
)
|
|
$
|
216.2
|
|
|
$
|
(43.7
|
)
|
Condensed Consolidating Statement of Operations
For the 13 weeks ended November 3, 2018
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,070.6
|
|
|
$
|
121.1
|
|
|
$
|
—
|
|
|
$
|
1,191.7
|
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
(758.0
|
)
|
|
(62.5
|
)
|
|
—
|
|
|
(820.5
|
)
|
|
Gross margin
|
—
|
|
|
—
|
|
|
312.6
|
|
|
58.6
|
|
|
—
|
|
|
371.2
|
|
|
Selling, general and administrative expenses
|
(0.2
|
)
|
|
—
|
|
|
(378.3
|
)
|
|
(31.8
|
)
|
|
—
|
|
|
(410.3
|
)
|
|
Credit transaction, net
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
(9.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(9.5
|
)
|
|
Other operating income (loss), net
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.2
|
|
|
Operating income (loss)
|
(0.2
|
)
|
|
—
|
|
|
(75.0
|
)
|
|
26.4
|
|
|
—
|
|
|
(48.8
|
)
|
|
Intra-entity interest income (expense)
|
(1.0
|
)
|
|
4.7
|
|
|
(44.9
|
)
|
|
41.2
|
|
|
—
|
|
|
—
|
|
|
Interest expense, net
|
—
|
|
|
(5.1
|
)
|
|
(5.6
|
)
|
|
0.1
|
|
|
—
|
|
|
(10.6
|
)
|
|
Other non-operating income (loss), net
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
Income (loss) before income taxes
|
(1.2
|
)
|
|
(0.4
|
)
|
|
(125.2
|
)
|
|
67.7
|
|
|
—
|
|
|
(59.1
|
)
|
|
Income taxes
|
—
|
|
|
0.1
|
|
|
53.1
|
|
|
(24.0
|
)
|
|
—
|
|
|
29.2
|
|
|
Equity in income (loss) of subsidiaries
|
(28.7
|
)
|
|
—
|
|
|
(92.8
|
)
|
|
(68.4
|
)
|
|
189.9
|
|
|
—
|
|
|
Net income (loss)
|
$
|
(29.9
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(164.9
|
)
|
|
$
|
(24.7
|
)
|
|
$
|
189.9
|
|
|
$
|
(29.9
|
)
|
|
Dividends on redeemable convertible preferred shares
|
(8.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.2
|
)
|
|
Net income (loss) attributable to common shareholders
|
$
|
(38.1
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(164.9
|
)
|
|
$
|
(24.7
|
)
|
|
$
|
189.9
|
|
|
$
|
(38.1
|
)
|
Condensed Consolidating Statement of Operations
For the 39 weeks ended November 2, 2019
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,649.5
|
|
|
$
|
334.3
|
|
|
$
|
—
|
|
|
$
|
3,983.8
|
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
(2,432.2
|
)
|
|
(220.0
|
)
|
|
—
|
|
|
(2,652.2
|
)
|
|
Restructuring charges - cost of sales
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(5.8
|
)
|
|
Gross margin
|
—
|
|
|
—
|
|
|
1,214.7
|
|
|
111.1
|
|
|
—
|
|
|
1,325.8
|
|
|
Selling, general and administrative expenses
|
(0.4
|
)
|
|
—
|
|
|
(1,257.0
|
)
|
|
(27.6
|
)
|
|
—
|
|
|
(1,285.0
|
)
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
(57.0
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
(59.4
|
)
|
|
Goodwill and intangible impairments
|
—
|
|
|
—
|
|
|
(35.2
|
)
|
|
(12.5
|
)
|
|
—
|
|
|
(47.7
|
)
|
|
Other operating income (loss), net
|
—
|
|
|
—
|
|
|
1.8
|
|
|
(0.4
|
)
|
|
—
|
|
|
1.4
|
|
|
Operating income (loss)
|
(0.4
|
)
|
|
—
|
|
|
(132.7
|
)
|
|
68.2
|
|
|
—
|
|
|
(64.9
|
)
|
|
Intra-entity interest income (expense)
|
(1.6
|
)
|
|
13.1
|
|
|
(140.9
|
)
|
|
129.4
|
|
|
—
|
|
|
—
|
|
|
Interest expense, net
|
—
|
|
|
(13.7
|
)
|
|
(14.9
|
)
|
|
0.7
|
|
|
—
|
|
|
(27.9
|
)
|
|
Other non-operating income
|
—
|
|
|
8.8
|
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
Income (loss) before income taxes
|
(2.0
|
)
|
|
8.2
|
|
|
(289.8
|
)
|
|
198.3
|
|
|
—
|
|
|
(85.3
|
)
|
|
Income taxes
|
—
|
|
|
(1.6
|
)
|
|
38.2
|
|
|
(32.9
|
)
|
|
—
|
|
|
3.7
|
|
|
Equity in income (loss) of subsidiaries
|
(79.6
|
)
|
|
—
|
|
|
(272.8
|
)
|
|
(227.1
|
)
|
|
579.5
|
|
|
—
|
|
|
Net income (loss)
|
$
|
(81.6
|
)
|
|
$
|
6.6
|
|
|
$
|
(524.4
|
)
|
|
$
|
(61.7
|
)
|
|
$
|
579.5
|
|
|
$
|
(81.6
|
)
|
|
Dividends on redeemable convertible preferred shares
|
(24.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.6
|
)
|
|
Net income (loss) attributable to common shareholders
|
$
|
(106.2
|
)
|
|
$
|
6.6
|
|
|
$
|
(524.4
|
)
|
|
$
|
(61.7
|
)
|
|
$
|
579.5
|
|
|
$
|
(106.2
|
)
|
Condensed Consolidating Statement of Operations
For the 39 weeks ended November 3, 2018
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,723.4
|
|
|
$
|
369.0
|
|
|
$
|
—
|
|
|
$
|
4,092.4
|
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
(2,561.6
|
)
|
|
(184.6
|
)
|
|
—
|
|
|
(2,746.2
|
)
|
|
Restructuring charges - cost of sales
|
—
|
|
|
—
|
|
|
(57.5
|
)
|
|
(5.7
|
)
|
|
—
|
|
|
(63.2
|
)
|
|
Gross margin
|
—
|
|
|
—
|
|
|
1,104.3
|
|
|
178.7
|
|
|
—
|
|
|
1,283.0
|
|
|
Selling, general and administrative expenses
|
(0.7
|
)
|
|
—
|
|
|
(1,230.4
|
)
|
|
(106.8
|
)
|
|
—
|
|
|
(1,337.9
|
)
|
|
Credit transaction, net
|
—
|
|
|
—
|
|
|
(167.4
|
)
|
|
—
|
|
|
—
|
|
|
(167.4
|
)
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
(34.3
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
(35.6
|
)
|
|
Goodwill and intangible impairments
|
—
|
|
|
—
|
|
|
(448.7
|
)
|
|
—
|
|
|
—
|
|
|
(448.7
|
)
|
|
Other operating income (loss), net
|
(0.1
|
)
|
|
—
|
|
|
21.8
|
|
|
3.8
|
|
|
—
|
|
|
25.5
|
|
|
Operating income (loss)
|
(0.8
|
)
|
|
—
|
|
|
(754.7
|
)
|
|
74.4
|
|
|
—
|
|
|
(681.1
|
)
|
|
Intra-entity interest income (expense)
|
(3.4
|
)
|
|
14.1
|
|
|
(198.8
|
)
|
|
188.1
|
|
|
—
|
|
|
—
|
|
|
Interest expense, net
|
—
|
|
|
(14.9
|
)
|
|
(14.2
|
)
|
|
0.2
|
|
|
—
|
|
|
(28.9
|
)
|
|
Other non-operating income
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
Income (loss) before income taxes
|
(4.2
|
)
|
|
(0.8
|
)
|
|
(966.3
|
)
|
|
262.7
|
|
|
—
|
|
|
(708.6
|
)
|
|
Income taxes
|
—
|
|
|
0.2
|
|
|
157.6
|
|
|
1.3
|
|
|
—
|
|
|
159.1
|
|
|
Equity in income (loss) of subsidiaries
|
(545.3
|
)
|
|
—
|
|
|
(865.7
|
)
|
|
(857.3
|
)
|
|
2,268.3
|
|
|
—
|
|
|
Net income (loss)
|
$
|
(549.5
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(1,674.4
|
)
|
|
$
|
(593.3
|
)
|
|
$
|
2,268.3
|
|
|
$
|
(549.5
|
)
|
|
Dividends on redeemable convertible preferred shares
|
(24.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.6
|
)
|
|
Net income (loss) attributable to common shareholders
|
$
|
(574.1
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(1,674.4
|
)
|
|
$
|
(593.3
|
)
|
|
$
|
2,268.3
|
|
|
$
|
(574.1
|
)
|
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 13 weeks ended November 2, 2019
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Net income (loss)
|
$
|
(35.5
|
)
|
|
$
|
7.0
|
|
|
$
|
(195.7
|
)
|
|
$
|
(27.5
|
)
|
|
$
|
216.2
|
|
|
$
|
(35.5
|
)
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
19.9
|
|
|
—
|
|
|
20.1
|
|
|
(0.2
|
)
|
|
(19.9
|
)
|
|
19.9
|
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
(0.4
|
)
|
|
Reclassification adjustment for (gains) losses to net income
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
(2.4
|
)
|
|
2.4
|
|
|
Reclassification adjustment for gains to net income
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
0.4
|
|
|
(0.4
|
)
|
|
Pension plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment to net income for amortization of actuarial losses
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
(0.3
|
)
|
|
0.3
|
|
|
Total other comprehensive income (loss)
|
22.8
|
|
|
—
|
|
|
22.4
|
|
|
0.4
|
|
|
(22.8
|
)
|
|
22.8
|
|
|
Total comprehensive income (loss)
|
$
|
(12.7
|
)
|
|
$
|
7.0
|
|
|
$
|
(173.3
|
)
|
|
$
|
(27.1
|
)
|
|
$
|
193.4
|
|
|
$
|
(12.7
|
)
|
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 13 weeks ended November 3, 2018
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Net income (loss)
|
$
|
(29.9
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(164.9
|
)
|
|
$
|
(24.7
|
)
|
|
$
|
189.9
|
|
|
$
|
(29.9
|
)
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
(2.5
|
)
|
|
|
|
|
(2.5
|
)
|
|
—
|
|
|
2.5
|
|
|
(2.5
|
)
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
(2.3
|
)
|
|
2.3
|
|
|
Reclassification adjustment for gains to net income
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
Pension plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment to net income for amortization of actuarial losses
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
Total other comprehensive income (loss)
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
Total comprehensive income (loss)
|
$
|
(30.4
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(165.4
|
)
|
|
$
|
(24.7
|
)
|
|
$
|
190.4
|
|
|
$
|
(30.4
|
)
|
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 39 weeks ended November 2, 2019
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Net income (loss)
|
$
|
(81.6
|
)
|
|
$
|
6.6
|
|
|
$
|
(524.4
|
)
|
|
$
|
(61.7
|
)
|
|
$
|
579.5
|
|
|
$
|
(81.6
|
)
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
(6.1
|
)
|
|
—
|
|
|
(6.0
|
)
|
|
(0.1
|
)
|
|
6.1
|
|
|
(6.1
|
)
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
|
Reclassification adjustment for (gains) losses to net income
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
|
8.6
|
|
|
—
|
|
|
8.6
|
|
|
—
|
|
|
(8.6
|
)
|
|
8.6
|
|
|
Reclassification adjustment for gains to net income
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
Pension plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment to net income for amortization of actuarial losses
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
(0.8
|
)
|
|
0.8
|
|
|
Total other comprehensive income (loss)
|
3.3
|
|
|
—
|
|
|
2.6
|
|
|
0.7
|
|
|
(3.3
|
)
|
|
3.3
|
|
|
Total comprehensive income (loss)
|
$
|
(78.3
|
)
|
|
$
|
6.6
|
|
|
$
|
(521.8
|
)
|
|
$
|
(61.0
|
)
|
|
$
|
576.2
|
|
|
$
|
(78.3
|
)
|
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 39 weeks ended November 3, 2018
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Net income (loss)
|
$
|
(549.5
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(1,674.4
|
)
|
|
$
|
(593.3
|
)
|
|
$
|
2,268.3
|
|
|
$
|
(549.5
|
)
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
(39.5
|
)
|
|
—
|
|
|
(39.0
|
)
|
|
(0.5
|
)
|
|
39.5
|
|
|
(39.5
|
)
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
0.3
|
|
|
Impact from adoption of new accounting pronouncements(1)
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
0.8
|
|
|
(0.8
|
)
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
(0.8
|
)
|
|
0.8
|
|
|
Reclassification adjustment for gains to net income
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
1.0
|
|
|
(1.0
|
)
|
|
Pension plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial loss
|
(6.5
|
)
|
|
—
|
|
|
(6.5
|
)
|
|
—
|
|
|
6.5
|
|
|
(6.5
|
)
|
|
Reclassification adjustment to net income for amortization of actuarial losses
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
(0.5
|
)
|
|
0.5
|
|
|
Total other comprehensive income (loss)
|
(46.2
|
)
|
|
—
|
|
|
(45.2
|
)
|
|
(1.0
|
)
|
|
46.2
|
|
|
(46.2
|
)
|
|
Total comprehensive income (loss)
|
$
|
(595.7
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(1,719.6
|
)
|
|
$
|
(594.3
|
)
|
|
$
|
2,314.5
|
|
|
$
|
(595.7
|
)
|
|
|
|
|
(1)
|
Adjustment reflects the reclassification of unrealized gains related to the Company’s equity security investments as of February 3, 2018 from AOCI into retained earnings associated with the adoption of ASU 2016-1.
|
Condensed Consolidating Balance Sheet
November 2, 2019
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
0.7
|
|
|
$
|
0.1
|
|
|
$
|
135.0
|
|
|
$
|
52.8
|
|
|
$
|
—
|
|
|
$
|
188.6
|
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
4.6
|
|
|
16.2
|
|
|
—
|
|
|
20.8
|
|
|
Intra-entity receivables, net
|
—
|
|
|
5.6
|
|
|
30.7
|
|
|
334.7
|
|
|
(371.0
|
)
|
|
—
|
|
|
Other current assets
|
—
|
|
|
—
|
|
|
145.5
|
|
|
61.7
|
|
|
—
|
|
|
207.2
|
|
|
Income taxes
|
—
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
Inventories
|
—
|
|
|
—
|
|
|
2,427.5
|
|
|
91.9
|
|
|
—
|
|
|
2,519.4
|
|
|
Total current assets
|
0.7
|
|
|
5.7
|
|
|
2,746.0
|
|
|
557.3
|
|
|
(371.0
|
)
|
|
2,938.7
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
741.6
|
|
|
9.6
|
|
|
—
|
|
|
751.2
|
|
|
Operating lease right-of-use assets
|
—
|
|
|
—
|
|
|
1,676.0
|
|
|
8.0
|
|
|
—
|
|
|
1,684.0
|
|
|
Goodwill
|
—
|
|
|
—
|
|
|
171.1
|
|
|
77.7
|
|
|
—
|
|
|
248.8
|
|
|
Intangible assets, net
|
—
|
|
|
—
|
|
|
243.9
|
|
|
20.3
|
|
|
—
|
|
|
264.2
|
|
|
Investment in subsidiaries
|
1,993.2
|
|
|
—
|
|
|
(331.2
|
)
|
|
(591.0
|
)
|
|
(1,071.0
|
)
|
|
—
|
|
|
Intra-entity receivables, net
|
—
|
|
|
161.0
|
|
|
—
|
|
|
2,573.0
|
|
|
(2,734.0
|
)
|
|
—
|
|
|
Other assets
|
—
|
|
|
—
|
|
|
173.8
|
|
|
22.6
|
|
|
—
|
|
|
196.4
|
|
|
Deferred tax assets
|
—
|
|
|
—
|
|
|
21.8
|
|
|
(3.5
|
)
|
|
—
|
|
|
18.3
|
|
|
Total assets
|
$
|
1,993.9
|
|
|
$
|
166.7
|
|
|
$
|
5,443.0
|
|
|
$
|
2,674.0
|
|
|
$
|
(4,176.0
|
)
|
|
$
|
6,101.6
|
|
|
Liabilities, Redeemable convertible preferred shares, and Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and overdrafts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
|
Accounts payable
|
—
|
|
|
—
|
|
|
259.8
|
|
|
74.1
|
|
|
—
|
|
|
333.9
|
|
|
Intra-entity payables, net
|
298.3
|
|
|
—
|
|
|
72.7
|
|
|
—
|
|
|
(371.0
|
)
|
|
—
|
|
|
Accrued expenses and other current liabilities
|
28.4
|
|
|
2.6
|
|
|
377.9
|
|
|
25.7
|
|
|
—
|
|
|
434.6
|
|
|
Deferred revenue
|
—
|
|
|
—
|
|
|
255.4
|
|
|
11.9
|
|
|
—
|
|
|
267.3
|
|
|
Operating lease liabilities
|
—
|
|
|
—
|
|
|
323.1
|
|
|
1.8
|
|
|
—
|
|
|
324.9
|
|
|
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
17.4
|
|
|
—
|
|
|
17.4
|
|
|
Total current liabilities
|
326.7
|
|
|
2.6
|
|
|
1,293.9
|
|
|
130.9
|
|
|
(371.0
|
)
|
|
1,383.1
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
—
|
|
|
146.3
|
|
|
642.5
|
|
|
—
|
|
|
—
|
|
|
788.8
|
|
|
Intra-entity payables, net
|
—
|
|
|
—
|
|
|
2,734.0
|
|
|
—
|
|
|
(2,734.0
|
)
|
|
—
|
|
|
Operating lease liabilities
|
—
|
|
|
—
|
|
|
1,442.5
|
|
|
6.4
|
|
|
—
|
|
|
1,448.9
|
|
|
Other liabilities
|
—
|
|
|
—
|
|
|
116.6
|
|
|
3.8
|
|
|
—
|
|
|
120.4
|
|
|
Deferred revenue
|
—
|
|
|
—
|
|
|
693.2
|
|
|
—
|
|
|
—
|
|
|
693.2
|
|
|
Total liabilities
|
326.7
|
|
|
148.9
|
|
|
6,922.7
|
|
|
141.1
|
|
|
(3,105.0
|
)
|
|
4,434.4
|
|
|
Series A redeemable convertible preferred shares
|
616.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
616.5
|
|
|
Total shareholders’ equity (deficit)
|
1,050.7
|
|
|
17.8
|
|
|
(1,479.7
|
)
|
|
2,532.9
|
|
|
(1,071.0
|
)
|
|
1,050.7
|
|
|
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
|
$
|
1,993.9
|
|
|
$
|
166.7
|
|
|
$
|
5,443.0
|
|
|
$
|
2,674.0
|
|
|
$
|
(4,176.0
|
)
|
|
$
|
6,101.6
|
|
Condensed Consolidating Balance Sheet
February 2, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
146.7
|
|
|
$
|
48.4
|
|
|
$
|
—
|
|
|
$
|
195.4
|
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
14.3
|
|
|
9.4
|
|
|
—
|
|
|
23.7
|
|
|
Intra-entity receivables, net
|
—
|
|
|
7.9
|
|
|
83.4
|
|
|
220.0
|
|
|
(311.3
|
)
|
|
—
|
|
|
Other current assets
|
—
|
|
|
—
|
|
|
215.9
|
|
|
28.1
|
|
|
—
|
|
|
244.0
|
|
|
Income taxes
|
—
|
|
|
—
|
|
|
5.1
|
|
|
0.7
|
|
|
—
|
|
|
5.8
|
|
|
Inventories
|
—
|
|
|
—
|
|
|
2,302.6
|
|
|
84.3
|
|
|
—
|
|
|
2,386.9
|
|
|
Total current assets
|
0.2
|
|
|
8.0
|
|
|
2,768.0
|
|
|
390.9
|
|
|
(311.3
|
)
|
|
2,855.8
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
789.6
|
|
|
10.9
|
|
|
—
|
|
|
800.5
|
|
|
Goodwill
|
—
|
|
|
—
|
|
|
206.3
|
|
|
90.3
|
|
|
—
|
|
|
296.6
|
|
|
Intangible assets, net
|
—
|
|
|
—
|
|
|
244.0
|
|
|
21.0
|
|
|
—
|
|
|
265.0
|
|
|
Investment in subsidiaries
|
2,155.7
|
|
|
—
|
|
|
(15.7
|
)
|
|
(305.5
|
)
|
|
(1,834.5
|
)
|
|
—
|
|
|
Intra-entity receivables, net
|
—
|
|
|
400.0
|
|
|
—
|
|
|
2,588.0
|
|
|
(2,988.0
|
)
|
|
—
|
|
|
Other assets
|
—
|
|
|
—
|
|
|
164.0
|
|
|
17.2
|
|
|
—
|
|
|
181.2
|
|
|
Deferred tax assets
|
—
|
|
|
—
|
|
|
24.5
|
|
|
(3.5
|
)
|
|
—
|
|
|
21.0
|
|
|
Total assets
|
$
|
2,155.9
|
|
|
$
|
408.0
|
|
|
$
|
4,180.7
|
|
|
$
|
2,809.3
|
|
|
$
|
(5,133.8
|
)
|
|
$
|
4,420.1
|
|
|
Liabilities, Redeemable convertible preferred shares, and Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and overdrafts
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
$
|
79.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78.8
|
|
|
Accounts payable
|
—
|
|
|
—
|
|
|
119.7
|
|
|
34.0
|
|
|
—
|
|
|
153.7
|
|
|
Intra-entity payables, net
|
311.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(311.3
|
)
|
|
—
|
|
|
Accrued expenses and other current liabilities
|
27.7
|
|
|
2.4
|
|
|
450.4
|
|
|
22.3
|
|
|
—
|
|
|
502.8
|
|
|
Deferred revenue
|
—
|
|
|
—
|
|
|
257.6
|
|
|
12.4
|
|
|
—
|
|
|
270.0
|
|
|
Income taxes
|
—
|
|
|
0.8
|
|
|
26.4
|
|
|
0.5
|
|
|
—
|
|
|
27.7
|
|
|
Total current liabilities
|
339.0
|
|
|
2.5
|
|
|
933.6
|
|
|
69.2
|
|
|
(311.3
|
)
|
|
1,033.0
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
—
|
|
|
396.0
|
|
|
253.6
|
|
|
—
|
|
|
—
|
|
|
649.6
|
|
|
Intra-entity payables, net
|
—
|
|
|
—
|
|
|
2,988.0
|
|
|
—
|
|
|
(2,988.0
|
)
|
|
—
|
|
|
Other liabilities
|
—
|
|
|
—
|
|
|
219.4
|
|
|
4.7
|
|
|
—
|
|
|
224.1
|
|
|
Deferred revenue
|
—
|
|
|
—
|
|
|
696.5
|
|
|
—
|
|
|
—
|
|
|
696.5
|
|
|
Total liabilities
|
339.0
|
|
|
398.5
|
|
|
5,091.1
|
|
|
73.9
|
|
|
(3,299.3
|
)
|
|
2,603.2
|
|
|
Series A redeemable convertible preferred shares
|
615.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
615.3
|
|
|
Total shareholders’ equity (deficit)
|
1,201.6
|
|
|
9.5
|
|
|
(910.4
|
)
|
|
2,735.4
|
|
|
(1,834.5
|
)
|
|
1,201.6
|
|
|
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
|
$
|
2,155.9
|
|
|
$
|
408.0
|
|
|
$
|
4,180.7
|
|
|
$
|
2,809.3
|
|
|
$
|
(5,133.8
|
)
|
|
$
|
4,420.1
|
|
Condensed Consolidating Balance Sheet
November 3, 2018
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
67.5
|
|
|
$
|
62.6
|
|
|
$
|
—
|
|
|
$
|
130.7
|
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
11.7
|
|
|
2.4
|
|
|
—
|
|
|
14.1
|
|
|
Intra-entity receivables, net
|
—
|
|
|
7.7
|
|
|
—
|
|
|
235.8
|
|
|
(243.5
|
)
|
|
—
|
|
|
Other current assets
|
—
|
|
|
—
|
|
|
191.5
|
|
|
26.7
|
|
|
—
|
|
|
218.2
|
|
|
Inventories
|
—
|
|
|
—
|
|
|
2,568.6
|
|
|
78.5
|
|
|
—
|
|
|
2,647.1
|
|
|
Total current assets
|
0.5
|
|
|
7.8
|
|
|
2,839.3
|
|
|
406.0
|
|
|
(243.5
|
)
|
|
3,010.1
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
801.7
|
|
|
8.7
|
|
|
—
|
|
|
810.4
|
|
|
Goodwill
|
—
|
|
|
—
|
|
|
206.3
|
|
|
302.7
|
|
|
—
|
|
|
509.0
|
|
|
Intangible assets, net
|
—
|
|
|
—
|
|
|
266.4
|
|
|
73.8
|
|
|
—
|
|
|
340.2
|
|
|
Investment in subsidiaries
|
2,085.2
|
|
|
—
|
|
|
250.3
|
|
|
(264.3
|
)
|
|
(2,071.2
|
)
|
|
—
|
|
|
Intra-entity receivables, net
|
—
|
|
|
400.0
|
|
|
—
|
|
|
2,593.0
|
|
|
(2,993.0
|
)
|
|
—
|
|
|
Other assets
|
—
|
|
|
—
|
|
|
183.9
|
|
|
17.7
|
|
|
—
|
|
|
201.6
|
|
|
Deferred tax assets
|
—
|
|
|
—
|
|
|
52.5
|
|
|
(16.3
|
)
|
|
—
|
|
|
36.2
|
|
|
Total assets
|
$
|
2,085.7
|
|
|
$
|
407.8
|
|
|
$
|
4,600.4
|
|
|
$
|
3,121.3
|
|
|
$
|
(5,307.7
|
)
|
|
$
|
4,907.5
|
|
|
Liabilities, Redeemable convertible preferred shares, and Shareholders’ equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and overdrafts
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
$
|
323.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
322.6
|
|
|
Accounts payable
|
—
|
|
|
—
|
|
|
310.5
|
|
|
29.1
|
|
|
—
|
|
|
339.6
|
|
|
Intra-entity payables, net
|
94.4
|
|
|
—
|
|
|
149.1
|
|
|
—
|
|
|
(243.5
|
)
|
|
—
|
|
|
Accrued expenses and other current liabilities
|
27.5
|
|
|
7.1
|
|
|
380.1
|
|
|
16.6
|
|
|
—
|
|
|
431.3
|
|
|
Deferred revenue
|
—
|
|
|
—
|
|
|
243.3
|
|
|
9.8
|
|
|
—
|
|
|
253.1
|
|
|
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
19.1
|
|
|
—
|
|
|
19.1
|
|
|
Total current liabilities
|
121.9
|
|
|
6.4
|
|
|
1,406.3
|
|
|
74.6
|
|
|
(243.5
|
)
|
|
1,365.7
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
—
|
|
|
395.8
|
|
|
264.6
|
|
|
—
|
|
|
—
|
|
|
660.4
|
|
|
Intra-entity payables, net
|
—
|
|
|
—
|
|
|
2,993.0
|
|
|
—
|
|
|
(2,993.0
|
)
|
|
—
|
|
|
Other liabilities
|
—
|
|
|
—
|
|
|
228.0
|
|
|
5.2
|
|
|
—
|
|
|
233.2
|
|
|
Deferred revenue
|
—
|
|
|
—
|
|
|
671.7
|
|
|
—
|
|
|
—
|
|
|
671.7
|
|
|
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
12.6
|
|
|
0.1
|
|
|
—
|
|
|
12.7
|
|
|
Total liabilities
|
121.9
|
|
|
402.2
|
|
|
5,576.2
|
|
|
79.9
|
|
|
(3,236.5
|
)
|
|
2,943.7
|
|
|
Series A redeemable convertible preferred shares
|
614.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
614.8
|
|
|
Total shareholders’ equity (deficit)
|
1,349.0
|
|
|
5.6
|
|
|
(975.8
|
)
|
|
3,041.4
|
|
|
(2,071.2
|
)
|
|
1,349.0
|
|
|
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
|
$
|
2,085.7
|
|
|
$
|
407.8
|
|
|
$
|
4,600.4
|
|
|
$
|
3,121.3
|
|
|
$
|
(5,307.7
|
)
|
|
$
|
4,907.5
|
|
Condensed Consolidating Statement of Cash Flows
For the 39 weeks ended November 2, 2019
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
$
|
95.2
|
|
|
$
|
0.9
|
|
|
$
|
(50.2
|
)
|
|
$
|
214.1
|
|
|
$
|
(146.5
|
)
|
|
$
|
113.5
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
—
|
|
|
—
|
|
|
(95.3
|
)
|
|
—
|
|
|
—
|
|
|
(95.3
|
)
|
|
Investment in subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
50.0
|
|
|
(50.0
|
)
|
|
—
|
|
|
Purchase of available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.7
|
)
|
|
—
|
|
|
(11.7
|
)
|
|
Proceeds from available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
|
7.1
|
|
|
Net cash provided by (used in) investing activities
|
—
|
|
|
—
|
|
|
(95.3
|
)
|
|
45.4
|
|
|
(50.0
|
)
|
|
(99.9
|
)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid on common shares
|
(58.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58.0
|
)
|
|
Dividends paid on redeemable convertible preferred shares
|
(23.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23.4
|
)
|
|
Intra-entity dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(146.5
|
)
|
|
146.5
|
|
|
—
|
|
|
Proceeds from term loans
|
—
|
|
|
—
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
|
Repayments of term loans
|
—
|
|
|
—
|
|
|
(294.9
|
)
|
|
—
|
|
|
—
|
|
|
(294.9
|
)
|
|
Settlement of senior notes, including third party fees
|
—
|
|
|
(240.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240.9
|
)
|
|
Proceeds from revolving credit facilities
|
—
|
|
|
—
|
|
|
562.0
|
|
|
—
|
|
|
—
|
|
|
562.0
|
|
|
Repayments of revolving credit facilities
|
—
|
|
|
—
|
|
|
(19.0
|
)
|
|
—
|
|
|
—
|
|
|
(19.0
|
)
|
|
Payment of debt issuance costs
|
—
|
|
|
—
|
|
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
|
(7.3
|
)
|
|
Repayments of bank overdrafts
|
—
|
|
|
—
|
|
|
(35.0
|
)
|
|
—
|
|
|
—
|
|
|
(35.0
|
)
|
|
Other financing activities
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
Intra-entity activity, net
|
(14.3
|
)
|
|
240.0
|
|
|
(167.4
|
)
|
|
(108.3
|
)
|
|
50.0
|
|
|
—
|
|
|
Net cash provided by (used in) financing activities
|
(94.7
|
)
|
|
(0.9
|
)
|
|
138.4
|
|
|
(254.8
|
)
|
|
196.5
|
|
|
(15.5
|
)
|
|
Cash and cash equivalents at beginning of period
|
0.2
|
|
|
0.1
|
|
|
146.7
|
|
|
48.4
|
|
|
—
|
|
|
195.4
|
|
|
Increase (decrease) in cash and cash equivalents
|
0.5
|
|
|
—
|
|
|
(7.1
|
)
|
|
4.7
|
|
|
—
|
|
|
(1.9
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(4.6
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(4.9
|
)
|
|
Cash and cash equivalents at end of period
|
$
|
0.7
|
|
|
$
|
0.1
|
|
|
$
|
135.0
|
|
|
$
|
52.8
|
|
|
$
|
—
|
|
|
$
|
188.6
|
|
Condensed Consolidating Statement of Cash Flows
For the 39 weeks ended November 3, 2018
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Signet
Jewelers
Limited
|
|
Signet UK
Finance plc
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
$
|
466.6
|
|
|
$
|
4.8
|
|
|
$
|
61.2
|
|
|
$
|
251.4
|
|
|
$
|
(470.5
|
)
|
|
$
|
313.5
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
—
|
|
|
—
|
|
|
(91.1
|
)
|
|
(2.3
|
)
|
|
—
|
|
|
(93.4
|
)
|
|
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
5.5
|
|
|
Purchase of available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
Proceeds from available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
9.0
|
|
|
Net cash provided by (used in) investing activities
|
—
|
|
|
—
|
|
|
(91.1
|
)
|
|
11.6
|
|
|
—
|
|
|
(79.5
|
)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid on common shares
|
(59.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59.8
|
)
|
|
Dividends paid on redeemable convertible preferred shares
|
(23.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23.4
|
)
|
|
Intra-entity dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(470.5
|
)
|
|
470.5
|
|
|
—
|
|
|
Repurchase of common shares
|
(485.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(485.0
|
)
|
|
Repayments of term loans
|
—
|
|
|
—
|
|
|
(22.3
|
)
|
|
—
|
|
|
—
|
|
|
(22.3
|
)
|
|
Proceeds from revolving credit facilities
|
—
|
|
|
—
|
|
|
698.0
|
|
|
—
|
|
|
—
|
|
|
698.0
|
|
|
Repayments of revolving credit facilities
|
—
|
|
|
—
|
|
|
(416.0
|
)
|
|
—
|
|
|
—
|
|
|
(416.0
|
)
|
|
Repayments of bank overdrafts
|
—
|
|
|
—
|
|
|
(10.1
|
)
|
|
—
|
|
|
—
|
|
|
(10.1
|
)
|
|
Other financing activities
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
Intra-entity activity, net
|
102.5
|
|
|
(4.8
|
)
|
|
(295.3
|
)
|
|
197.6
|
|
|
—
|
|
|
—
|
|
|
Net cash provided by (used in) financing activities
|
(467.8
|
)
|
|
(4.8
|
)
|
|
(45.7
|
)
|
|
(272.9
|
)
|
|
470.5
|
|
|
(320.7
|
)
|
|
Cash and cash equivalents at beginning of period
|
1.7
|
|
|
0.1
|
|
|
150.5
|
|
|
72.8
|
|
|
—
|
|
|
225.1
|
|
|
Increase (decrease) in cash and cash equivalents
|
(1.2
|
)
|
|
—
|
|
|
(75.6
|
)
|
|
(9.9
|
)
|
|
—
|
|
|
(86.7
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(7.4
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(7.7
|
)
|
|
Cash and cash equivalents at end of period
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
67.5
|
|
|
$
|
62.6
|
|
|
$
|
—
|
|
|
$
|
130.7
|
|